This was Venezuela eight years ago: so much untapped gold and silver, its production would influence spot prices. Copper, too.
This is Venezuela today: so much untapped gold and silver, its production would influence spot prices. Copper, too.
One of the geologists on my R-E-S-P-E-C-T list, Vicente Mendoza in Colombia, sent me his thoughts on the matter. I visited with Senor Mendoza, Venezuelan by birth, at Colombia’s El Marmato about 20 months ago. (Photo: Mr. Mendoza at El Marmato – Thom Calandra photo)
Vicente Mendoza’s geologic and social handiwork at what I call “the mess of ultra-rich El Marmato” puts him in league with the world’s leading VPs of exploration. In my estimado, anyway.
That tortured mountain, overrun with villagers slopping around its toxic dirt and river water, now has more than 13 M oz gold at 1 g/tonne and 75 M oz of silver at 6 g/t, the senior geologist says. Much of the proving up of the resource stems from Mr. Mendoza and his team at Gran Colombia Gold (TSX: T.GCM, Stock Forum).
I first met Mr. Mendoza years ago, when El Marmato was run by GCM predecessor Medoro Resources. Mr. Mendoza and his team, including Hernan Ortiz Delgado, go way back.
Hernan Delgado worked at Colombia’s Frontino mine in the 1970s and has written a book about the historic property’s veins and geology. In that book, one photo shows Senor Delgado and a Frontino team of miners with well-known structural geologist Richard Sillitoe.
Mr. Mendoza, a scientist in his own right and as gentle a geologist as ever I have met, presented (last time I saw him) a timeline on how then-Medoro would organize El Marmato, overrun with illegal miners and mercury-tainted soil and water.
The good senor also showed me details on how his team would continue to prove up millions of new ounces on the mountain’s lower half while planning for a possible new mine and open pit on the backside of the upper side. His plans included detailed capital expenditures and targeted new and existing areas of this patch of Colombia’s Middle Cauca mineral belt.
Thus far, nearly everything he said several years ago as far as exploration and production has happened. Alas, the villagers on the mountain are still “in process,” as they say.
The process takes years, it appears. Medoro and now-Gran Colombia have engineered a new town and incentives for all families at El Marmato. “The social aspect is always something very important in Latin America, and we respect how everyone here feels this is a part of their own life and soul,” Mr. Mendoza said at the time.
Gran Colombia is now Colombia’s largest gold producer, and with enough silver to issue plata-denominated notes. GCM also controls Zancudo at Titiribi, near Sunward Resources (TSX: V.SWD, Stock Forum). Gran Colombia’s portfolio includes that problematic but also gold-crazy-rich Frontino Mine at Segovia.
Back to Venezuela. Mr. Mendoza just told me something that I have to get into print: about the promise of his homeland. This, remember, is a country whose government has assumed control of most assets of value on behalf of the state.
“Hugo Chavez (Venezuela’s leader) is a nutcase and will soon kick the bucket, but he has left the country a total economic mess,” says Robert Moriarty of www.321gold.com. Mr. Moriarty, like Mr. Mendoza a veteran goldie, says it likely will be years before any of Venezuela’s Canada-operated gold prospectors, stripped of their deposits in and around Brisas and Las Cristinas along so-called Kilometer 88 of the country’s Bolivar State, get a chance even of winning them back through ongoing court and inter-agency procedures.
Mr. Moriarty, a prospector and resources writer who is based on Grand Cayman Island, makes himself crystal clear within 10 seconds of saying anything. He relates that at least one of the companies involved in Venezuela before Mr. Chavez “expropriated” the metals properties was “bribing everyone in sight down there” and thus got its just karma returned in kind.
No comment from me on that. I have yet to visit Venezuela but have been within 100 kilometres at Sandspring Resources’ severely undervalued Toroparu (TSX: V.SSP, Stock Forum) gold and copper project in Guyana. (I think Toroparu and Sandspring, and nearly all resources in Guyana, suffer from a contagious case of Mr. Chavez, who routinely issues propaganda and state actions about Venezuela control of Las Cristinas-Brisas. Still, SSP at its pitiful current price of $1.50 a share Canadian is a purchase for those, including me, willing to sidestep country risk. I own 2,000 shares of SSP.)
Mr. Mendoza in his senior years has firm beliefs about his native land. “I predict something now to you based on my knowledge and drilled data on the area,” he says via e-mail. “THE BIGGEST GOLD DEPOSIT OF THE WHOLE WORLD IT IS THE BRISAS-LAS CRISTINAS, Km 88 of the Bolivar State, Venezuela.” (The caps are Vicente Mendoza’s.)
Senor Mendoza continues, “WHEN MR. CHAVEZ he is out of Venezuela and A BIG AND PROPERLY (RUN) COMPANY HAS THE RIGHT FOR BOTH LAS BRISAS AND LAS CRISTINAS DEPOSITS, AND IT’S DRILLED UP TO 800 m at depth from surface (now it is only to 350 to 400 m down from the surface) THEY WILL REPORT MORE THAN 100 MILLIONS ONUCES OF GOLD, at a little more than 1 g/t Au, PLUS 0.2% Cu. “
He concludes, “I am old, but you are young enough to see that. Please remember this mail: it is historical.”
Gran Colombia’s chairman, Serafino Iacono, tells me from Colombia that the company has a three-million ounce deposit in Venezuela called El Callao. If, that is, “has” is the right word for anything in Venezuela.
As for contending ownership, the one company Mr. Mendoza believes has first right to all of Brisas is Gold Reserves Inc. (TSX: T.GRZ, Stock Forum and GRZ). The company’s list of technical reports on the Venezuela property go on … and on … and on. See here.
Las Cristinas is a different story, he says, with transfers of rights among several companies.
I will keep in touch with Vicente Mendoza and plan to see him next time I get down to Colombia – almost surely within the next three months. I do not own shares of Gran Colombia.
IRON ORE: I now own shares of West Africa Mining Ore. I have no intention at this time of covering the Guinea operator. Iron ore is one of the building blocks of developing nations along with copper, coal, chorizos and coffee beans. For me, a highly speculative iron ore prospector acts as a diversifying addition to my gold, silver, copper, molybdenum and platinum-weighted holdings.
GUANAJUATO: Off to Mexico this weekend to refresh my research on two longstanding silver stakes: Great Panther Silver (GPL and TSX: T.GPR, Stock Forum) and Endeavour Silver (EXK and TSX: T.EDR, Stock Forum). The two, since my last visit to the Guanajuato operations in central Mexico, have generated gi-normous profits for their shareholders, including me. I am this week back in the market buying shares of Bob Archer’s Great Panther, which I believe has an osteopathic ability to heal itself; i.e., show shareholders it is well on track to one day being a five-million-ounce yearly silver producer. Great Panther, it shares roughed up in recent months, just extended its strike zone by 50 percent on the San Ignacio portion of its Guanajuato holdings. For its part, Bradford Cooke’s Endeavour Silver is spreading its silver wings in Chile via property options and purchases.
EUROPE ON LE BUS: In 13 days, I will be accompanying a group of miners, prospectors, professors and promoters across several European cities. The Zimturoad show on a bus will make its way to the Munich Gold Show and visit Zurich, Geneva, Hamburg and Vienna. If you’d like to know more, get a free lunch, cocktails and an overview of the metals marketplace, please visit: https://roadtrip.zimtu.com/. The sponsor is Zimtu Capital (TSX: V.ZC, Stock Forum) and seven of its portfolio companies. To register: click here – it is free.
NEW ORLEANS: I will be speaking at Brien Lundin’s New Orleans Investment Conference. Click on this link for details. The topic: “10x Return Candidates in Ghana, Colombia, Sierra Leone, Quebec and Ethiopia.” I go on at 7:35 p.m. Thursday Oct. 27, followed by a revealing workshop. … I am a partner of Torrey Hills Capital, which is in Del Mar, near San Diego, California. Great Panther Silver is a Torrey Hills client.
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.
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