This report was first transmitted to TickerTrax™ subscribers Thursday morning, Dec. 31.
MEDELLIN, Colombia -- First thing we do before this country erupts into its traditional year’s end blast tomorrow. No, not kill all the lawyers.
People here had enough killing in the 1980s, when I lived here briefly, and during the 1990s and much of this decade that closes this evening.
No, first thing we do Thursday morning (today, December 31, 2009) is stake ourselves to the gold and silver prospectors with serious appreciation potential. These are the tiny Colombian (and in some cases Mexican and Peruvian) gold explorers that are reserving their best prospects for themselves – and not contractors, third parties, joint ventures or BGPs, as in Big Gold partnerships.
“The prospector generator biz model is one that says don’t drill one’s own projects—rather, JV them and let someone else spend the high-risk money. Keeps dilution down,” says Paul Zweng, a Stanford-trained geologist whose Honolulu based hedge fund has appreciated some 125% (perhaps more) this year – mostly on the back of junior miners that fully intend to eat their own cooking.
Zweng, who as CEO sold QGX of Mongolia some years ago, says Altius, Riverside and Eurasian Minerals exemplify the so-called generator model. It is not a necessarily optimal way of running an exploration company.
“In contrast, the ‘eat your own cooking’ model says when you finally get a great project, don’t JV it. Own it and drill it yourself. This is the model of Osisko (TSX: T.OSK, Stock Forum), West Timmins, International Tower Hill (TSX: T.ITH, Stock Forum), East Asia Minerals (TSX: V.EAS, Stock Forum) and Focus Ventures (TSX: V.FCV, Stock Forum). These companies can reach $1 billion or more in market cap,” says Zweng of Resource Venture Advisors. (See: Zweng’s Zen.)
In Colombia, eat-your-own candidates include Antioquia Gold (TSX: V.AGD, Stock Forum) and Colombian Mines Corp. (TSX: V.CMJ, Stock Forum). I am touring this week and next, in a second round, the region of Antioquia where these two companies are active.
In the gold-boomer nation of Colombia, Colombian Mines has been awarded almost 30,000 hectares of mineral rights and has applications pending for about 300,000 more hectares of GOLD properties across the country. CEO Robert Carrington in an interview today in Medellin tells me he is targeting a promising section of its Yuramalito Gold Project not far from El Marmato, that lush but troubled mountain of spectacular possibilities controlled in large part by Medoro Resources (TSX: V.MRS, Stock Forum).
(Medoro, with deep political and capital connections in the country, Thursday added another Marmato-area concession, Echandia, to its bulging portfolio when it bought a small British-based company, Colombia Gold. I own shares of Medoro and have for 18 months. I have seen Echandia, Marmato and the surrounding areas numerous times in the past three years. The upper and lower halves of this overrun yet gold-dusted mountain 
some three hours from Medellin are the power cord of Colombia’s central gold cordillera – see photo below. Please: See coverage.)
The Carringtons’ Colombia Mines is less than an $18 million Canadian company. I have been to Yuramalito and seen La Escuela portion of the site that is most promising. (Please see Thom articles.)
This week, Bob and Gloria Carrington, Medellin born and the small prospector’s business development director, were meeting with a representative from a Nevada-based gold miner whose business development office is in Chile. Drilling at Yuramalito likely will begin in January.
Antioquia Gold: Must-buy
Antioquia Gold (TSX: V.AGD, Stock Forum), which I saw this week after one of the most gorgeous two-hour countryside rides I ever have taken to a gold mine, is in the same tiny league as CMJ. Yet the fledgling company, run by a group of mining engineers from Alberta and a Colombian patriarch named Fernando Jaramillo, is almost surely, in my layman’s view of the property above and below ground, sitting atop a shear zone of historic proportions.
If I am wrong on this point, let the record show it in January, when all of the assay results of Antioquia Gold’s current drill program are unveiled. Rick Thibault’s Antioquia Gold just might have what BG (as in Big Gold, in this case Anglogold and B2Gold) is searching for at Gramalote some several kilometers from Cisneros.
The fact is, Antioquia Gold’s mesothermal system of structures already is displaying evidence of high-grade gold. The rock I came across contained many elements of potent mineralization (see photo).
A relevant question for this gold project, as geologist German Guerrero put it whilst we hacked at some sugar cane and delved into a historic tunnel on this perfect summer day (equatorial Andes), is: “We would like los pozos perforados (drill holes) to prove these prospect will show the depth, the continued (extended) intrusions and the porphyrys.
Antioquia Gold’s results from some 30 holes across four targeted prospects at its 5,500 hectare Cisneros Project are partially in the bag and reported. Grades are clearly running well above one gram per metric ton … and in some cases four to six times that. Results from one of the prospects, Guayabito, are “in the mail, or close to it,” Mr. Guerrero tells me as climb to the 2,200-meter or so high point of Cisneros.
I shall have more for Ticker Trax subscribers in due course. (CMJ is a Planetary Prospect of our subscriber service. So is Candente Copper and the looming Mexico-Peru spinoff called Candente Gold, which are in the news today.)
For our Stockhouse audience, I present a little more color on a gorgeous and gold-booming nation that most North Americans, alas, never will see in their lifetimes.
Primed for porphyry
Investors are primed on Colombia, a nation of 43 million, one in five of those citizens in the business of mining resources or growing flowers, wheat, maize, tobacco (bananas and so on). The nation also has been a net exporter of oil for almost 25 years.
The country used to produce more gold than any nation in Latin America. Now, with some 40% of its gold prospects unmapped, Colombia is recovering from years of bloody sloth and produces about 450,000 ounces of gold in a year, a sixth of what Ghana in West Africa is doing now.
Colombia is safe and clean. Plus, the president has a 97% approval rating, is not afraid to wipe out bands of terrorists and is said to be considering an unprecedented and as-yet non-constitutional third term. (No one here knows whether that is good for gold and mining by the way.)
It’s not just gold and copper that are kicking into gear. Pacific Rubiales (TSX: T.PRE, Stock Forum) and other companies, among them Alange, are starting to produce serious barrels of oil using reclamation techniques that would make MIT and other universities proud.
“No longer the backwards place you think of when you think of Colombia,’’ Luis E. Giusti, CEO of energy company Alange (TSX: V.ALE, Stock Forum), tells me over sashimi at a Bogota hot spot. Outside in the early evening, Christmas lights are everywhere, and so are shoppers.
Luis and many other talented folks in the country, such as geologist Vicente Mendoza of Medoro Resources, are ex-pats from Venezuela, where Hugo Chavez as leader has more or less disenfranchised an entire nation of talented achievers.
“Most folks think when you come here you are going to go home in a body bag,” says Mr. Carrington, our gold mining CEO (CMJ) and longtime in-country geologist. “Just ain’t so.” Homicide rates are closing in on their lowest levels since such statistics were kept in the Antioquian city of Medellin. (The real kill capitals of the galaxy these days appear to be in Mexico and Brazil.)
Many Colombians have a sense of humor about oppression and the years of kidnappings, narco-terrorism and violence that ran through 50 or 60 years of the nation’s lifespan as a Latin American democracy. Especially during the holidays … and New Year’s is probably the biggest here.
One tradition is to fashion life-size figures of characters you just want to see burn, baby, burn on New Year’s Eve. Like the Hugo Chavez dummy in the photo above – taken at a finca outside Medellin, not more than a few kilometers from the Rio Negro estate of President Alvaro Uribe. (Take that, Mr. Chavez.)
Ticker Trax subscribers are rushing the gates at year’s end here. They want their Colombia gold-copper prospects as badly as some of us want our coffee beans in the morning.
At Buritica, the Bob Allen (Continental-Bullet portfolio of properties) project not far from Medellin that is privately held for now, coffee growers were harvesting their beans as we go underground.
“We are seeing some of these people shift into mining from raising the crop,” Stuart Moller, VP of Exploration for Buritica and other Bob Allen-Continental Gold properties, told me as we trekked above and below ground. Armed soldiers accompanied us.
Later this week, I shall visit Georges Juilland and Phil O’Neill’s and gang’s Titiribi-Sunward. I will see that collection of concessions just after New Year’s Day (western calendar), if I survive the traditional Colombian partying that accompanies year-end
Until then, I sign off, and I thank 43-year-old German Guerrero, chief geologist, and one of his five assistants. 22-year-old Emilio Suarez, for their insight into what might become the next major gold discovery of Colombia.
One day one or more of the names Cisneros for Antioquia Gold, or Yuramlito for Colombia Mines, or Titiribi for Sunward, or Marmato for Medoro, will be listed in history books as a generational fountain of gold/silver/copper riches. Investors serious about what looks like a continued lush cycle for natural resources have to understand Colombia as a grass-roots exploration landscape. (Peru and Mexico also belong in portfolios, as do Ghana and parts of Nevada, Idaho, South Africa and China.)
Ticker Trax™ Planetary Prospects: There are 12. Some are referenced in the above article. Those who wish to subscribe might consider the holiday offer now at the front of www.Stockhouse.com. There are several spots still open.
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Coming in January 2010
Vancouver Resource Investment Conference, Jan. 17-18. I’ll be up there with two Ticker Trax workshops and plenty of material from Colombia, Ghana, Peru and Mexico. Companies wishing to participate in a Friday evening dinner before the conference’s official start, an annual affair I help arrange with our friends from Gold Antitrust Action Committee and extra-special guests, please ping me or send a note to GATA.Org’s Chris Powell at www.GATA.org. The conference itself is free for those who register at www.cambridgehouse.com.
Ticker Trax™
Please see tickertrax.com to learn more about this wealth service and its 12 Planetary Prospects. Also, please see its breakout feature examinations of one Ghana gold prospector, one Guyana gold prospector and gold producer and one looming molybdenum mine in British Columbia. Subscribers, please click here for password-secure Ticker Trax.
HOLDINGS: Thom’s stock holdings are listed for all Stockhouse members on www.Stockhouse.com under the “portfolio setting” for user TCALANDRA. It is public and free to view. He also owns recently minted gold and silver coins and shares of two private companies, one of them a nickel and platinum prospector in South Africa & DRC (Congo). Thom does not do private placements or accept payment in return for coverage. Thom participates in select company-sponsored and company-paid tours of mining sites after examining the properties off-site for many months and in some cases, years.
(All photos by Thom Calandra. Thom owns shares of 11 of the 12 Planetary Prospects in Ticker Trax, including Candente, and will be purchasing No. 12, CMJ, soon. He also owns Medoro Resources and has for at least 18 months via a stake in now merged Colombia Gold Fields. Thom does not own Focus or Antioquia Gold or any of the other companies in this article.)
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THOM CALANDRA of Ticker Trax helps his audience find value in a quagmire of investment choices. Thom co-founded and was executive VP of news for CBS MarketWatch and MarketWatch.com. As the voice of Thom Calandra's StockWatch and The Calandra Report, Thom pegged $300-ounce gold as a long-term hold and dyed his hair blonde multiple times as gold surpassed $400, $500 and $600.
Ticker Trax™ is published by Stockgroup Media Inc. 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/Stockgroup Media 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 should be independently verified. The editor and publisher are not responsible for errors or omissions or responsible for keeping information up to date or for correcting any past information. Ticker Trax does not receive compensation of any kind from any companies that may be mentioned in the report. Any opinions expressed are subject to change without notice. Owners, employees and writers may hold positions in the securities that are discussed in Ticker Trax. PLEASE DO NOT EMAIL THOM SEEKING PERSONALIZED INVESTMENT ADVICE, WHICH HE CANNOT PROVIDE. Copyright 2010 all rights reserved.
