Most of this report first was published for Ticker Trax subscribers.
MEDELLIN – We are onto something red hot in Colombia.
Naturally, it has to do with gold. Copper. Coal. Phosphates.
Grande words of advice first: mining companies and their deep-pocket bankers are scraping the bottom of the ore piles for Colombia prospects. Most of them – the ones that, as mining and energy tycoon Serafino Iacono often tells me, don’t even know how to spell Colombia -- will squander their investors’ money.
The prospectors we follow for our Ticker Trax audience will not squander their supporters’ money. Some already have quintupled stakes in a seven-month span.
Earlier this week, we were on site with geologists Robert Carrington and Campos Elias Perilla. Mr. Carrington, president of Colombian Mines (TSX: V.CMJ, Stock Forum), and his lead in-country geologist, Mr. Perilla, were at Cerro de Cobre (Copper Hill), their company’s iron-oxide (limonite and hematite) ore deposit some 2 ½ hours north of the city of Bogota.
Cerro de Cobre is one of about 95 project areas Colombian Mines owns in Colombia. Cerro de Cobre’s carbonate limestone reef, along with a handful of other promising prospects, might best be splayed out to joint venture partners.
“We are not a prospector generator,” says Nevada resident Mr. Carrington, who runs Colombian Mines with CEO Nate Tewalt of Washington State and Gloria Carrington, Bob Carrington’s Medellin-born wife. “We have several properties, no denying it, that have great scope and scale but just don’t fit our charter, our game plan. Copper here at Cerro de Cobre gave us 22 meters of 3.27 percent copper (two years ago) channel sampling. But it is not gold, and we are a gold company.”
Colombian Mines owns several other projects that Mr. Carrington, a Nevada-trained geologist who has been accumulating Colombia concessions since the mid-1990s, is willing to see joint-ventured to larger companies. “Part of the strategic value is bringing in a partner that is, say 20 times, or 50 times, our size. And part of it is realizing that Colombian properties are in demand right now.”
For instance, Mr. Carrington, as we slog our way through some of the thickest jungle I have been in since my last trip to Colombia two months ago, shouts that the company’s El Dovio copper property is coveted by a number of companies. “But we think there is a good chance it is a gold-rich VMS, with copper and zinc. So we’re not going to push the button on that.”
Ditto for Yarumalito, Benicia and other gold-centric properties in Antioquia, the department that houses Medellin, El Marmato and the historic Frontino and Zancudo Mines with which the aforementioned Mr. Iacono is involved.
What might be moving Colombian Mines’ shares, to the delight of our Ticker Trax audience these past six months, might be one of its other 95 project areas luring potential joint venture partners. These partners, if ever named and transacted, would pay CMJ cash and then “carry” the drilling and other maintenance of the project as the new partner “earns in” its stake.
One property in the CMJ portfolio, Anori, is 2,300 hectares surrounding another 100 hectares that a successful South America gold driller and miner, Yamana Gold (NYSE:AUY, Stock Forum) and (TSX: T.YRI, Stock Forum), controls and considers a promising prospect. This is all public information and is also on CMJ’s website.
Yamana’s project is the Solferino Mine near Segovia in Antioquia. I recall, the last time CMJ’s Nate Tewalt and I were in Medellin a few months ago, he was telling me stories about working in exploration for Meridian Gold. Yamana bought Meridian in 2007.
Not that a pedigree – Nate is a geologist – means anything in terms of farming out a property for a cash stream. Mr. Tewalt also has worked in various capacities for US Borax, Tenneco Minerals, Cornucopia Resources and Great Basin Gold. Against that CV, and the connections that Mr. Carrington has after 31 years in the gold business, there is little reason to believe that CMJ is poised to let Yamana drill the beans out of Anori.
Besides, I am no believer in prospector generators. This is in most cases not the “model” I would buy at the gold hobby shop called speculative mining companies. Why give up the best gold prospects, especially when you have been staking these claims, digging these trenches and scraping this rock, even poring through old U.S. Geological Surveys of Colombia, since the mid 1990s?
Easy: When you own 300,000 hectares of Colombia, you got to move, move, move.
Mr. Carrington would only say, as we hacked our way 1,900 meters or so up to the outcroppings of Cerro de Cobre, that Anori’s quartz veins are in a shear zone. He also noted that channel samples CMJ conducted at Solferino Mine showed 17 meters of 6.6 gram gold (per metric ton).
Could a promising CMJ gold property be packaged off in return for cash payments to a larger miner with deep pockets? Just as we reached the top of a two-hour climb in this part of the eastern cordillera of the Andes, Mr. Carrington turned to me, his pick axe already whacking at calco-pyritic rock, and said, “When you control a lot of properties in a very promising country, and I think we do, getting someone into the mix that has cash, talent and motivation is what they call a strategic decision.”
Remember: Mr. Carrington (please see photos of him today at Cerro de Cobre and of me and lead in-country geologist Campos Elias Perilla) is the homegrown geologist who says things, in a twang, such as this: “You know, my grandma used to say all the time, ‘I put Robert into the dirt to play when he was two years old, and look at him, he’s still in it.’ “
Or my personal favorite – on our one-day tour of the old Independence Mine in Nevada two weeks ago. As we were driving from the town of Battle Mountain to the site, which is controlled by tiny General Metals Corp. (OTO: GNMT, Stock Forum), Mr. Carrington’s consultant-geologist on the Nevada project, there in the back seat of the pick-up truck, felt his foot push a metal object. He looked down and, seeing a gun on the floor, said, “Say, Bob, is that thing loaded?” Mr. Carrington replied: “Well, why would I be hauling around a gun without bullets in it?”
The Colombian Mines portfolio has plenty of bullets. More than one of them will go to other companies. When that happens., CMJ will have more cash, time and corporate palanca than it already hasto make Yarumalito, possibly El Dovio, Benicia, Rionegro … or even that phosphate property with coking coal possibilities … a winner.
Note: CMJ is a Planetary Prospect of Ticker Trax, one of 13 that we research in depth and that we own, along with our audience of subscribers. Others are located in Ghana on the Kibi Gold Belt, in southern and northern Peru and in Mexico. Also: South Africa and Nevada and British Columbia.
Congratulations: We have just viewed a report on Pediment Gold (TSX: T.PEZ, Stock Forum), whose Baja property we viewed and reported on last autumn from Baja, Mexico. Mickey Fulp, Mercenary Geologist, gets credit for digging into his notes and pulling out a report that Educates, Entertains and Enhances his audience. Please see the report. I do not own Pediment Gold shares.
Lookout list: Extreme value melt-Up likely for Bellhaven Copper & Gold (TSX: V.BHV, Stock Forum), which is active here in Colombia and which I toured several months ago. I await more developments on Colombia properties from Julio Benedetti’s Belhaven. Please see our Ticker Trax and Stockhouse coverage of the Panama-based prospector. I own a token amount of shares of Bellhaven at a price of about its current level of 22 cents Canadian. Bellhaven is pursuing San Lucas properties along and above Colombia’s Rio Magdalena and elsewhere. It is, as stated here several times, the cheapest thing I know of in Colombia with top-notch geologists and producing and prospective gold projects.
More: We are reviewing our notes from the Antioquia Gold (TSX: V.AGD, Stock Forum) tours we took in January andown a token amount of shares of Bellhaven at a price of about its current level of 22 cents Canadian. Bellhaven is pursuing San Lucas properties along and above Colombia’s Rio Magdalena and elsewhere. It is, as stated here several times, the cheapest thing I know of in Colombia with top-notch geologists and producing and prospective gold projects.
More: We are reviewing our notes from the Antioquia Gold (TSX: V.AGD, Stock Forum) tours we took in January and February of this year. I do not own the shares and am doing more research on Cisneros in Antioquia.
Pitching and swelling’ along Las Bambas
Antares Minerals’ Haquira Copper Project is preparing an updated mineralogy review of its ore deposits in Peru. Antares (TSX: V.ANM, Stock Forum) appears within one year of elevating its copper-values to a transaction level that could see the company shares triple from their current price. Were that to happen, anyone who has taken the rough five-hour drive from mellow Cusco to Haquira’s 14-billion-pound copper (with molybdenum and gold) prospect, and spent time at the camp some 4,200 meters high, as I just did, would enjoy a tankful of fruition.
In our Part-One review of Antares’ Haquira copper project in Peru, we misspelled a geology term. Antares Minerals’ neighbor 10 kilometers away is Xstrata Copper’s sprawling Ferrobamba copper project. Xstrata spaces many of its drill holes some 15 to 25 meters apart. (We saw it from the air; please see photo.) The tight spacings are because of the type of rock beneath Xstrata’s 400,000 meters of drilling. A skarn is a Swedish mining term for course-grained, calc-silicate rock (garnet and pyroxenes, typically formed from replacement of limestone by hydrothermal fluids).
“The reason why one has to drill closely spaced holes in skarn is that the geometry of skarns are notoriously difficult to predict,” Paul Zweng says. “They can pinch and swell. Because of their irregular shape, one must drill them on a closely-spaced pattern so that the irregular pattern can be constrained. The copper at Ferrobamba is hosted in skarn, so the geologists need to know where it occurs and where it doesn't.”
Antares Minerals was an Internet shell before Paul Zweng, John Black and their partners started probing copper-moly-gold porphyry deposits in Las Bambas district. Mr. Black, Mr. Zweng and another founder, Dave Anderson, share links in their educations (geology – Queen’s University, Ontario; Stanford University in California) and/or their work experience, largely in Mongolia from 2002 to 2004 or so. In addition, Antares CFO Mark Wayne was a founding shareholder of Mr. Zweng’s Mongolia-centric QGX Ltd. Kevin Heather, on site at Haquira with us this past week, is Antares VP of geology and also studied with Paul Zweng at Queen’s U. John Black met Paul Zweng at Stanford University, where Paul earned his doctorate.
John Black spent time in Chile and in Mongolia with Western Metals before that company’s China activities hastened the sale of the company. John worked for Western Metals for about nine or 10 years and has written at length about the geology of epithermal gold-silver and porphyry copper-gold deposits.
We’ll have revelations about Antares’ Haquira copper-moly-gold deposit in coming issues of Ticker Trax.
More congratulations: Medoro Resources (TSX: V.MRS, Stock Forum) appears to have locked in Frontino Mine, the pension-troubled yet lush and historic mine below the town of Segovia in Antioquia. Congratulations to consultant Serafino Iacono, who helped engineer the $200 million pending purchase – pursuant to due diligence, Medoro CEO John Hick tells me.
Newspapers here in Colombia have been headlining the sale of Frontino, Colombia’s most famous mine, all of this week. It clears the political air ahead of the May 30 presidential election. We have been following Medoro as a gateway into the world of Colombia mining since its predecessor at Antioquia mining site El Marmato, Colombia Goldfields, more or less self destructed. I own Medoro shares via my ill-timed purchase of Colombia Goldfields shares several years ago at insanely high prices.
Our Ticker Trax take six months ago on Frontino -- and reaffirmed three months ago -- was this: Frontino and its history of pilfered pockets of extremely high-grade ore would need to be resolved by government and union administrators and welcomed by a corporate savior – Medoro in this case -- before the May 30 presidential election in this country. It appears – cross your fingers -- that has happened.
As an aside, Mr. Hick, when I asked him why Medoro is reporting grades at Frontino but not widths, replied, “At this point, we only have limited historical information regarding Frontino. That is why we negotiated for a due diligence period.”
Please see our Ticker Trax archives for coverage of Frontino – bankrupt pensions, unhappy miners and a company that looks to fund the pension and get Frontino’s historic and some say enormous gold output revved up again. Mr. Iacono, instrumental in many mining and energy transactions in Colombia, is in Cartagena this week at the World Economic Forum with a well-known Canadian banker who likely will participate in further financings of new entities tied to gold projects in the country.
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HOLDINGS: Thom’s holdings are listed for all Stockhouse members at www.Stockhouse.com under the “portfolio setting” for user TCALANDRA. It is public and free to view. He and his family own recently minted gold and silver coins and shares of a number of public and two private companies: Ivanhoe Nickel & Platinum in Africa and an Internet company called Mobyling. Thom owns each of the 12 Planetary Prospects in Ticker Trax.
THOM CALANDRA of Ticker Traxhelps his audience find value in a quagmire of investment choices. Thom started CBS MarketWatch andMarketWatch.com. As the voice of Thom Calandra's StockWatch and The Calandra Report, Thom pegged sub-$300-ounce gold as a long-term hold in year 1999.
Ticker Trax™ is published by Stockhouse Publishing Ltd. Ticker Trax is an information service for subscribers and neither Stockhouse nor Thom Calandra is a broker or an investment advisor. None of the information contained therein constitutes a recommendation by Mr. Calandra or Stockhouse that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Ticker Trax does not purport to tell or suggest the investment securities subscribers or readers should buy or sell for themselves. Subscribers and readers of Ticker Trax should conduct their own research and due diligence and obtain professional advice before making any investment decisions. Ticker Trax will not be liable for any loss or damage caused by a reader’s reliance on information obtained in the reports. Subscribers and readers are solely responsible for their own investment decisions. Opinions expressed in Ticker Trax are based on sources believed to be reliable and are written in good faith, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. All information contained in Ticker Trax