U.S. Global Investors travels the world in search of new investment opportunities in the natural resources and emerging markets sectors. Often that travel is to remote provinces that also can present physical and political dangers. Jayant Bhandari, a U.S. Global consultant, recently visited gold projects deep in the interior of Colombia. Here’s his dispatch.
We visited Ventana Gold’s La Bodega project, which is a short helicopter ride from the city of Bucaramanga in the eastern interior of Colombia, not far from the border with Venezuela.
La Bodega is still an early stage project, but it has released some drill results that have attracted some attention. Adjacent to La Bodega is Greystar Resources’ Angostura project, which has measured and indicated resources of more than 10 million ounces of gold and 50 million ounces of silver, plus an inferred resource of another 3 million-plus ounces of gold.
Gold mining in Colombia has a history going back nearly five centuries, and the country is one of the world’s top producers. According to the World Gold Council, Colombia produced 40 tonnes of gold in 2007 (18th in the world), double its output in 2002.
In Bucaramanga, we were escorted by private security and the army provided protection when we were at the camp site of La Bodega. While the private security was an attempt to be extra safe, it was obvious that the security has improved very significantly. Those who have been to Colombia on earlier occasions attest to the fact that there has been a huge improvement in the security, as well as in the economic and social situation.
The bad stories of the past have still not brought the tourists back to the beautiful capital city of Bogota, where we needed no security and could walk around freely.
Alvaro Uribe, Colombia's pro-business and pro-American president, is currently serving his second four-year term, and a constitutional referendum effort is under way to allow him to stay for a third term.
During Uribe’s presidency, the Revolutionary Armed Forces of Colombia (FARC) and other armed rebel groups have suffered a series of military defeats. Polls consistently show him as very popular—his job approval rating as of last month was 68 percent. It had been as high as 91 percent in June 2008, after a military operation freed 15 high-profile hostages.
Uribe gives very high importance to creating an investment climate so as to create fiscal resources to invest in the welfare of the people and to eliminate social injustices. He has also sparked some controversy -- the army has been blamed for human rights abuses and his attempt to change the constitution to run for a third term is a hot topic.
Overall, however, we returned with a positive opinion of the situation in Colombia.
The following securities mentioned in the article were held by one or more of U.S. Global Investors’ clients as of 3/31/09: Greystar Resources, Ventana Gold. 09-431