Week in Review: A Mining & Exploration Retrospect (Jan 12-18)
Colombia kidnap victims still missing
By press time Friday, little was known about the five people abducted earlier in the day from Braeval Mining’s [T.BVL] Snow Mine gold project in northern Colombia. The three employees and two consultants included a Canadian, two Colombians and two Peruvians. The Peruvian consulate identified two victims as Javier Leandro Ochoa and Jose Antonio Mamani. The other names haven’t been released.
The hostages were taken by members of the National Liberation Army (ELN) in a region described as a traditional ELN stronghold, the Globe and Mail reported. With an estimated 1,500 members, the ELN is much smaller than the Revolutionary Armed Forces of Colombia (FARC), news reports stated.
Although FARC holds peace negotiations with the government, “the ELN has been seeking peace talks … without success. Unlike the FARC, it has not renounced ransom kidnappings,” according to the G&M.
“Miners in Colombia have traditionally paid tributes, or ‘war taxes,’ to rebels and other illegal armed groups,” the paper added.
Geologist gets jail
A Vancouver court handed former mining executive John Gregory Paterson a six-year prison sentence for his faked assay scam, the CBC reported on Friday. Paterson pleaded guilty last September to four counts of fraud.
As CEO of Southwestern Resources and a qualified person, Paterson signed off on 433 assays that he invented between 2003 and 2007. His make-belief numbers were used in a 2005 PEA for the Boka Gold Project in China.
According to the CBC, Paterson’s lawyers told a sentencing hearing that “he suffers from severe depression and argued he didn’t carry out the fraud to line his pockets. Instead, Paterson was motivated by wishful thinking and a crippling fear of failure.”
But the Crown prosecutor told court how investors suddenly lost their savings. “Really, the floor fell out from underneath them,” the CBC quoted him. “It was an absolute shock and a terrible loss.”
Land claims clash with claim-staking
A possible overhaul of British Columbia’s claim-staking process could give natives more power to block early-stage exploration on Crown land. A Monday Vancouver Sun article discussed implications of a December decision by the Yukon Court of Appeal, which ruled that the territorial government must consult and “accommodate” the Ross River Dena Council before awarding mineral claims within the Ross River Area.
So far the ruling concerns a region surrounding one native band. But it might have wider repercussions within the Yukon and B.C. As the Sun pointed out, the three judges behind the decision also sit on the B.C. Court of Appeal, “meaning they could rule similarly in any separate B.C. case.”
Mining Association of B.C. spokesperson Zoe Younger told the Sun that B.C., unlike the Yukon, doesn’t automatically approve exploration once a claim has been staked. Different circumstances “have different trigger points and thresholds,” she said.
Nevertheless the Sun stated that Andrew Gage, a lawyer with West Coast Environmental Law, “called the Yukon decision ‘hugely significant’ and urged the B.C. government to take notice or face the prospect of more litigation with the same results in this province.”
In a statement issued Monday, the Association for Mineral Exploration B.C. said, “We are encouraging the Yukon government, First Nations and Yukon Chamber of Mines to work together to resolve this issue in a practical way that brings certainty to everyone. AME BC is supporting YCM and following this important file closely. The government of Yukon has been given 60 days to determine if it will appeal the decision to the Supreme Court of Canada.”
A Venezuelan nationalization gets World Bank approval
An international tribunal has dismissed a long-running claim against Venezuela’s takeover of a Canadian company’s gold project. The Wednesday decision by the World Bank’s International Center for Settlement of Investment Disputes found the country’s actions “did not amount to an expropriation. They were contractual responses to what the tribunal considers to be contractual breaches.”
According to a Friday Bloomberg report, “Venezuela’s National Guard seized control of … Las Cristinas mine, which has reserves of about 27 million ounces of gold, in November 2001 from Vannessa Ventures [now Infinito Gold [V.IG]]. The rights were transferred to Crystallex International Corp [T.KRY] in late 2002 before being taken over again by Venezuela in 2011.”
In a February 2011 news release, Crystallex stated it seeks restitution of its assets and compensation for losses, otherwise it would seek full compensation totalling more than US$3.8 billion. The company listed Las Cristinas as its principal asset. In January 2012 the TSX delisted Crystallex.
Other mining companies with ICSID disputes against Venezuela include Gold Reserve [V.GRZ] and Rusoro Mining [V.RML], Bloomberg stated.
President Hugo Chavez pulled his country out of the arbitration process last year, but dozens of previous cases are still pending.
A partial gold standard could be the best of all worlds
“The world is moving step by step towards a de facto gold standard,” wrote Ambrose Evans-Pritchard in Thursday’s Telegraph. As the dollar and euro lose their lustre, central banks continue to acquire yellow metal—some 536 tonnes last year.
The European Monetary Union, Evans-Pritchard said, “is a dysfunctional construct, covering two incompatible economies, prone to lurching from crisis to crisis, without a unified treasury to back it up. The dollar stands on a pyramid of debt. We all know that this debt will be inflated away over time—for better or worse. The only real disagreement is over the speed.”
Meanwhile Germany prepares to repatriate some of the gold it stores in New York and Paris, an action he attributes to popular pressure. “The fact that this popular pressure exists—and is well-organised—reflects a breakdown in trust between the major democracies and economic powers. It is a new political fact in the global system.”
Evans-Pritchard doesn’t, however, foresee a complete breakdown of fiat currency. “A partial gold standard—created by the global market and beholden to nobody—is the best of all worlds. It offers a store of value (though no yield). It acts [as] a balancing force. It is not dominant enough to smother the system.”
He concluded, “Let us have three world currencies, a tripod with a golden leg. It might even be stable.”
Nothing like it
Big, near-surface nuggets in the region around Ballarat have provoked gold rushes since the mid-1800s. Now an especially big find might incite more madness in Australia’s Victoria state.
Armed with a metal detector, an amateur prospector found a 177-ounce nugget, the BBC reported on Thursday. For gold value alone, it’s worth about US$315,000. But its curiosity value might add a premium, according to another local, Cordell Kent.
“I have been a prospector and dealer for two decades and cannot remember the last time a nugget over 100 ounces has been found locally,” the BBC quoted him. “It’s extremely significant as a mineral specimen. We are 162 years into a gold rush and Ballarat is still producing nuggets—it’s unheard of.”
Kent attributed the unnamed man’s success to a state-of-the-art metal detector.
“I’ve got no doubt there will be a lot of people who will be very enthusiastic about the goldfields again. It gives people hope,” he said. “There’s nothing like digging up money—it’s good fun.”
Watch a short video of the great big nugget here.