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Calgary firm seizes golden opportunity in Colombia

With gold reaching new highs, resource investors are looking to the resource-rich and under-explored country of Colombia. But is the political risk too high?

Doug Firby - November 12, 2009

Throughout human history, few undertakings have carried more cachet than the quest for gold. The Roman poet Virgil wrote of the “auri sacra fames” (cursed thirst for gold). And in the centuries since, there have been countless fortunes made and lost, and countless tales of intrigue, betrayal, broken hearts and scams.

It might be hard to believe that there’s anywhere on earth that hasn’t been poked and prodded to death in the search for this enduring precious metal, which is enjoying a renaissance in value, well above $900 US an ounce.

And yet, a small Calgary-based company believes it has found one overlooked site, a large and highly promising area in the heart of Colombia, just 70 km north-east of the city of Medellin. And now Antioquia Gold Inc., named for the department (province) within which its mining property is situated, is looking for investment in its Cisneros Project to verify what its experienced cast of founders believe is an overlooked gem.

“There’s no doubt about the presence of gold,” says Brad Van Den Bussche, a geologist and Vice-President and Director of Antioquia. “. . . There are dozens of high grade occurrences.”

How much gold? Although comprehensive drilling must still be done, early indicators are tantalizing indeed: Using 20 pre-existing tunnels carved out over the last century by artisanal miners, the company has accumulated more than 1,100 samples. Some recent results found 76 grams per ton of gold over a width of 700 cm, and 32 g/t over a broader 2.5-metre sample. In all, a review of 13 mineralized structures on a small portion of the property suggests a potential of 429,000 ounces, valued at more than $400 million at today’s prices.
“The potential is huge there,” says CEO Richard Thibault.

Promising results, of course, don’t sway bankers: Antioquia will use most of its current financing to begin drilling the 279-hectare Cisneros property and determine the full extent of the deposit. “We have a mandate to do it right,” says Jim Decker, another founder and company chairman. “We all want to see this thing succeed.”

But, as intriguing as the “what” is how a group of 10 core investors found themselves looking for riches in the heart of a country known for its violent history with guerrillas and notorious drug trafficking cartels.

Colombia’s gold belt has long been known as a source for high grade gold. With more than 80 million ounces produced, it stands as South America’s second largest producer. According to a report prepared for Mona Minas S.A., a privately-held property investment and gold mining company, the country remains largely unexplored and “its vast resources relatively untapped.” In 2006, Colombia produced just 1.49 million ounces of gold with the majority of mines operated as a craft or artisan industry.

More articles by Doug Firby