Condoto's Crap | Plus: Silver? In Bolivia
MEDELLIN, Colombia -- Colombia is where I made millions of USD on paper. The profit shriveled almost entirely in three-plus years.
The profits shriveled because the paper was CUSIP paper. The companies were tracking potential gold and copper, and even, in one bone-zone choice I use as an example here, alluvial platinum via an
Australia-traded piece of stock.
Colombia: Panning For Gold
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Colombian natural resource companies have suffered far more share-loss since March 2011 than those exploring in Canada and in parts of Mexico.
"We were riding high in 2009 and 2010 for sure. But the new government (2010) could not live up to its promises," says
Robert W. Allen of
Grupo de Bullet, a longtime minerals property syndicator.
(See: painting of Colombia gold panner at Bullet's Medellin office today)
The local, regional and federal governments' promises to miners in this bold and beautiful nation? They were legion: to take a
Big Data approach to the filing of thousands of concession permits, exploration permits and claims; to work with mining companies in handling ever-present illegal miners and their deadly
polvo loco explosives; to present firm definitions of paramo (eco-system altitude limits on development) and other environmental taboos.
And to wipe clean in Colombia's lush forests and hills the tens of thousands of terrorists and guerillas in remote areas of the country. This was a theme of
Juan Manuel Santos when he ran for president and won in 2010, then again earlier this year.
No such luck. This president is spending more time pretending he is an international peace soothsayer than administering to his nation's needs. Ego rules, I guess.
At
Grupo de Bullet, Mr. Allen, now 68, provided properties for dozens of prospectors in the red-hot prospecting years of 2006 to 2011. They included
Solvista Gold, Red Eagle Mines,
Continental Gold, Colombia Crest Gold, Antioquia Gold, Trident Gold, Cordoba Minerals and Otu Minerales. I've been to almost every one of 'em, some twice or thrice.
Bob Allen, a tall, lean Arkansas wanna-be tycoon, started coming down here in the early 1980s. On the management side, his group survives because of a management team that lives here full time, some natives of Medellin and the area and some from the states.
Practically, Bullet also must credit the geological strength of
Continental Gold's Buritica, which will likely be the first new (underground) gold mine in Antioquia. The mine at Buritica is one of the richest (in terms of grade) gold and silver vein mines in the world.
Stuart Moller, one of the Bullet geology team from the mid-2000s, identified the richest veins at Buritica and developed the underground network. His track record includes large silver discoveries in Bolivia and Mexico.
The
Department of Antioquia -- where Buritica and other promising mines or deposits are located -- is probably one of the richest areas of gold and silver mineralization in the world. Copper, too.
So rich, that a Canada, American and Aussie scrum to be here and turn a quick buck led to poor geology, run-ins with regulators, expensive drilling costs. And a flood of illegal miners to successful mining or exploration projects when the ordinary folks scratching out a living read the Internet press releases of these companies on their cell phone screens.
These pitfalls and others have knocked the
caca crap ?out of most of the Canada, USA and Australia companies exploring here.
Companies that have tendered their pickaxes in other parts of Colombia have fared
even worse.
Our
caca case in point:
Condoto Platinum. Look at
the chart if you want to go skiing. Heck, you cannot even find a chart of Canadian Phil O'Neill's Condoto share price.
The Australia ticker for Condoto was delisted and assigned to a real estate company.
Mr. O'Neill, I believe from Calgary, told me ?a little more than a year ago, "This is the best investment you ever will make." That is a direct quote. I bought in at 50 cents Australian. The stock is a penny, as in one-cent, or even lower, if you can find somewhere to trade it.
Condoto chose the crazy area of
Choco for its fortune and fame. Mr. O'Neill, like many mineral prospecting CEOs in foreign lands these days, managed the company by remote control from wherever the heck he was in the world.
Condoto's two sites in Colombia riffed through $12 million USD QUICKLY.
See report. Phil O'Neill is pursuing separate opportunities now in Hong Kong and Myanmar.
To be fair, not that I feel like being generous with words, the Department of
Choco, or part of it -- the part that is Condoto Platinum (or was?) -- is loaded with guerillas and
banditos. Political head cases and narco-cash hired guns.
At Pulacayo in Bolivia earlier this week?
Bad luck -- a miner's strike -- might have worsened matters. Yet for the life of me, I cannot understand why.
Mr. Allen, in contrast, at Bullet, has seen labor unrest, crime, paper jams, goofy regulators and devastating bandito-miner explosives (Segovia) in his almost 40 years in Colombia. He and his team are chugging along, albeit at a slower pace in the four-year downturn in metals' prices. (I just returned from a wonderful Novena Christmas ceremony at the Bullet offices in Medellin: prayer, children, singing, food.)
Regarding Mr. O'Neill, at some point in the past year or two, Condoto's team could not even get into the property. Too many machetes and guns?
Other headaches, too. I guess they don't make gold and platinum exploration geologists like they used to. I asked to go in and got no response from Condoto and Mr. O'Neill. So I had to settle for visiting another Choco company that is not only surviving, but thriving.
(More later on that.)
You can have my $5,000 of
Condoto Platinum shares
(original purchase price) in exchange for an embroidered machete.
What was I thinking?
Alluvial platinum in Colombia? Alluvial -- washed and tussled by water against rock and sand -- in river beds mostly.
By the way, one of Condoto's money/geological team hailed from Colombia:
Georges Julliand, a European transplant to Latin America who founded
Sunward Resources in picturesque Titiribi.
Georges Julliand is a 60-something longtime engineer who lives mostly in Medellin. I have met him several times and been to Sunward's copper and gold project at Titiribi three or four times.
Titiribi in this lush and friendly country (where even the kidnap artists and guerillas are said to offer an espresso or maybe a last puff before they pull their triggers) is a historic mining town. It also is in the rolling Andean foothills of Antioquia. Antioquia has crisp Spanish. Tremendous work ethic. The city of
Medellin. Rivers. Valleys.
Plus: lots of gold, copper and other minerals. This is because of the
Mid-Cauca Minerals Belt that crosses a swath of Antioquia.
Titiribi is chock full of splendid farms, majestic ranches and wealthy legal and illegal lords who DO NOT WANT AN OPEN-PIT MINE in the hills above their
fincas.
Sunward at Titiribi somehow managed to conserve a few million dollars of cash through the past four years of exploration drilling, planning, constructing a modern camp. That's a slight positive for the stock, which I own and which is wavering here at 12 cents Canadian.
Perhaps Georges Julliand's brother, a fast-moving European banker, is watching expenses.
Sunward is in an established mining district. (Albeit from generations ago.) So residents know how to hold a pick-axe, pack explosive gun powder into their knapsacks, ride mules and pick coffee beans, all at the same time.
Guess who the latest of Sunward's revolving door CEOs is?
Phil O'Neill. (SWD in Canada). Phil jumped ship as managing director of the Aussie platinum company earlier this year.
Did I tell you I am getting no response from these former Condoto folks for their side of the Choco mess? I will stop there, before I get into some real heat.
I was going to tell you all about that Choco company that is producing gold ND COPPER consistently:
Atico Mining. (ATY in Canada) I will save it for early next week. Atico is a
BUENO story.
When I started writing this, sitting here in Medellin, I meant to talk about how the
Colombian peso just made my XMAS shopping about 20 percent cheaper. I got off track thinking about that piece of down-under stock called Condoto.
Better I follow the gentle reminders of my here Colombian
compadres here in town:
tranquillo, hombre. Tranquillo.
TCR NOTES: Hey,
silver is starting to show
a little torque this week.
Prophecy Coal/Development hopes to use the same let's-take-this-town approach in a slightly more problematic mine: Bolivia's
Pulacayo.
(See the TCR photo log. And photo above at mine entrance)
If
Prophecy's strategy works, an entire mining district will re-open in that silver-laden nation. If that happens, a 7-cent freely traded PCY stock (Prophecy) will give some of its several thousand shareholders -- and every silver-minded hedge fund in North America -- a very easily traded run for their money. Coal assets in Mongolia are a bonus, if thermal coal ever kicks into high gear, that is.
If I were you all, I would be looking at CEO John Lee's insider purchases, just filed for December 15 on PCY (Canada ticker).
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-- Thom Calandra
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Thom Calandra & TCR are researchers and investors. They are not registered investment advisers, nor do they wish to be. The research and material they offer to subscribers are meant as editorial opinion.