MEDELLIN, Colombia – This is where the hottest resource money is: Colombia. Specifically, the department of Antioquia.
Some of that resource capital, particularly a supposedly $350 million that is transacting this week at Colombia's annual mining trade show, will go up in smoke.
Antioquia holds a third of the nation's mining titles. Gold is the hot plate du jour. Gold output in the country (headed to three million ounces annually by 2012) is on track to help Colombia regain the title of Latin America's most prolific gold producer.
That braggadocio title was lost to Peru, Chile and others about 70 years ago. Now, Colombia is playing catch-up. The central bank is even boosting its official gold holdings in overseas purchases; Colombia now holds nine metric tons of gold in official reserves, the first net increase in 13 years.
Still, any miner, financier or prospector with knowledge of the countryside and mineral belts is chasing iron ore, coal, silver, copper, even bamboo plantations amid the coffee trees and orchid farms. "This is how it is, pretty crazy," says Georges Juilland, the European and Peruvian patriarch and engineer who created Sunward Resources (TSX: V.SWD, Stock Forum) at picturesque Titiribi. See article on Antioquia. (Photo: Dr. Amit Tripathi, geologist and VP of Exploration at Sunward's Titiribi – Thom Calandra photo)
These rip notes provide highly speculative investing ideas. All of the following is based on first-hand reporting this week, my 13th or 14th visit to Colombia since 2007.
Continental Gold (TSX: T.CNL, Stock Forum), owner of veined gold blockbuster Buriticá, is reporting some of the richest gold (and silver) grades in recent memory: 25 meters of 12-grams gold in one stretch. The stock is steaming in Canada trading. The deep drill program (more than 1,000 meters down) just started at the Antioquia property. I asked Stuart Moller, VP of Exploration, whether we can expect more blockbuster gold and silver readings in the next month. "We are geologically confident. We have 50 holes that did not make the 43-101 cut-off (late June)." Personally, I think we will see further grades in coming weeks that rival those insanely rich ones that Extorre Gold Mines (TSX: T.XG, Stock Forum) has been reporting in Argentina. We'll see. I reckon we also could see a Continental Gold compliant resource for Buritica in the next three weeks.
I heard Serafino Iacono, a mining financier here, and the founder of El Marmato and Frontino owner Gran Colombia Gold (TSX: T.GCM, Stock Forum), is putting together a private equity raise for a Colombia iron ore and smelter operation. He is trying to raise $15 to $25 million in Canada. That is unconfirmed. Mr. Iacono is usually successful on the money front.- The governor of Antioquia signed scores of technical applications the other day. The signings brought a sigh of relief to at least five companies seeking to get their exploratory drilling started. "There are companies here that have not drilled an inch and have been here for years," says Miller O'Prey, the Belfast, Ireland, lad who has lived in Medellin for six years and now is running Solvista Gold (TSX: V.SVV, Stock Forum). Mr. O'Prey, a geologist, with properties from Robert Allen's Grupo de Bullet, is taking a shot at what looks like rich polymetallic veining at Guadalupe and Caramanta in central and northern Antioquia. Mr. O'Prey worked with Continental at Buritica and with Grupo de Bullet, one of the largest stakeholders of mining properties in the country. Kinross Gold (NYSE: KGC, Stock Forum) own about 9.9 percent of Solvista and Bob Allen about 25 percent via Grupo de Bullet. "We hope to be drilling at Guadalupe by November," said Mr. O'Prey, whose diction is thick with a northern Ireland lilt, in English and Spanish.
- /www.stockhouse.com/tools/?page=%2FFinancialTools%2Fsn%5Foverview%2Easp%3Fsymbol%3DV%2ECLB%26table%3DLIST">TSX: V.CLB, Stock Forum), Hans Rasmussen's foray into little drilled porphyry and other mineralization structures in and around La Mina, Fredonia and Venecia in Antioquia. The doctor of geology here is at La Mina outcrop and is showing me how magnetite in a sample is magnetic. The sample he is holding runs about 0.9 grams per ton gold over a 135-metre trench sample collected by AngloGold around 2005. /www.stockhouse.com/Columnists/2011/August/31/Two-promising-gold-juniors-in-Colombia-s-Cauca">/www.stockhouse.com/tools/?page=%2FFinancialTools%2Fsn%5Foverview%2Easp%3Fsymbol%3DV%2EMAD%26table%3DLIST">TSX: V.MAD, Stock Forum). Miranda is working properties or "doing transactions" in Colombia, Alaska and Nevada. Ken is a lifelong geologist with a basket of academic degrees and an even bigger basket of discoveries or successful uranium and gold models in Alaska and Nevada.
NOTES: I hope in September to see Golden Fame's (TSX: V.GFA, Stock Forum) newly-purchased property near the town of Guanajuato, Mexico. Guanajuato is a colonial hillside town with a subterranean chamber of tunnels for transportation and for mining.
Finally, I offer this disclosure note aboutTorrey Hills Capital in San Diego, California. I am a partner of Torrey Hills Capital, which is in Del Mar, near San Diego. That investor outreach firm lists none of the companies in this report as clients. I do not own shares of any of the companies in this report.
Stockhouse members – the service is free – can see my entire portfolio online. It is under the portfolio function and my user name, which is TCALANDRA. There is nothing in my portfolio suitable for risk-averse investors. I am not a financial adviser. Owning any of these securities could result in your participation in the crying game. Please see my comments in this and other articles about the benefits of holding securities and physical metals for long spans of time.
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