Colombia Gold Mining Stock List

by Olivier on June 1, 2009

My research is indicating Colombia is starting to emerge as one of the go to countries for gold mining companies. More money is finding its way into the country and miners operating in Colombia are getting noticed. Buying mining stocks means you need to do your DD when it comes to country risk. Right now Colombia is flying under the radar. But interest is picking up as the opportunity for great potential returns clearly outweighs the risks.

Here is a list of mining stocks doing business in Colombia. I will update the list when I come across new stocks worth adding:

AU – AngloGold Ashanti. AngloGold is trying to increase its presence in Colombia. Here is their Colombia country report.
GSL.TO – Greystar Resources – Their property is adjacent to VEN.TO
VEN.TO – Ventana Gold – Currently a position in my portfolio
BTO.TO – B2Gold – On my public list

The following info about Colombia from B2Gold’s website will help you better gauge country risk:

Republic of Colombia

Colombia Area: 1,141,748 sq. km
Population: 45.0 million (July 2008 est.)
Capital city: Bogotá
President, Head of Government Alvaro URIBE Velez (elected May 2002; assumed office August 07, 2002; re-elected May 2006)

During the pre-Columbian period, the area now known as Colombia was inhabited by indigenous societies situated at different stages of socio-economic development, ranging from hunters and nomadic farmers to the highly structured Chibchas, who are considered to be one of the most developed indigenous groups in South America.
The first permanent settlement in Colombia was at Santa Marta, founded by the Spanish in 1525. Santa Fe de Bogota was founded in 1538 and, in 1717, became the capital of the Viceroyalty of New Granada, which included what are now Venezuela, Ecuador, and Panama. Bogota was one of three principal administrative centers of the Spanish possessions in the New World. The area became Spain’s chief source of gold and was exploited for emeralds and tobacco.
Full independence was proclaimed in 1813, and in 1819 the Republic of Greater Colombia was formed. The new republic included all the territory of the former Viceroyalty (Colombia, Venezuela, Ecuador and Panama).
Colombia’s history has been characterized by widespread, violent conflict. Two civil wars resulted from bitter rivalry between the Conservative and Liberal parties: The War of a Thousand Days (1899-1903) claimed an estimated 100,000 lives, and La Violencia (the Violence) (1946-1957) claimed about 300,000 lives.
The “Plan Colombia” program was unveiled in 1999 to combat narco-terrorism; spur economic recovery; strengthen democratic institutions and respect for human rights; and provide humanitarian assistance to internally displaced persons.
Alvaro Uribe, an independent, was elected president in May 2002 (and re-elected in May 2006) on a platform to restore security to the country. Among his promises was to continue to pursue the broad goals of Plan Colombia within the framework of a long-term security strategy. In the fall of 2002, Uribe released a national security strategy that employed political, economic and military means to weaken all illegal narco-terrorist groups. The Uribe government offered to negotiate a peace agreement with these groups with the condition that they agree to a unilateral cease fire and to end drug trafficking and kidnapping.
In 2004, the Uribe government established, for the first time in recent Colombian history, a government presence in all of the country’s 1,098 municipalities (county seats). Attacks conducted by illegally armed groups against rural towns decreased by 91% from 2002 to 2005. Between 2002 and 2006, Colombia saw a decrease in homicides by 37%, kidnappings by 78%, terrorist attacks by 63%, and attacks on the country’s infrastructure by 60%. Coca crop eradication and cocaine and heroin interdictions are setting records.
Although much attention has been focused on the security aspects of Colombia’s situation, the Uribe government also is making significant efforts on issues such as expanding international trade, supporting alternate means of development, and reforming Colombia’s judicial system.
In January 2007, Colombian leaders presented a new strategy to consolidate and build on progress under Plan Colombia, called the “Strategy to Strengthen Democracy and Social Development.” The new strategy continues successful Plan Colombia programs while putting greater emphasis on consolidation of state presence, including access to social services, and on development through sustainable growth and trade.

Colombia is a free market economy with major commercial and investment ties to the United States. Transition from a highly regulated economy has been underway for more than 15 years with tariff reductions, financial deregulation, privatization of state-owned enterprises and adoption of a more liberal foreign exchange rate. These policies eased import restrictions and opened most sectors to foreign investment.
Foreign investors are welcomed as technology, management expertise, access to oversees markets, and finance, can be brought to the market
Colombia’s economy is heavily dependent upon its natural resources. Main exports include its well known coffee, petroleum and petroleum products, emeralds, fruits, flowers, iron and steel, textiles and apparel.
Colombia has not suffered any dramatic economic collapses. Prudent fiscal policies are maintained and economic reforms including tax, pension and budget reforms are pursued.
The sustained growth of the Colombian economy can be attributed to an increase in domestic security, the policies of keeping inflation low and maintaining a stable currency (the Colombian peso), petroleum price increases and an increase in exports to neighboring countries and the United States as a result of trade liberalization.
Canada’s Prime Minister, Stephen Harper, visited Colombia in July 2007 to advance closer economic links with Colombia. Free trade negotiations between Canada and Colombia are underway and once agreed upon, is expected to strengthen the relationship between the two countries and boost already strong two-way trade.
The economic growth seen in Colombia closely ties to Latin American economic trends:
1. Foreign direct investment in Latin American countries sharply increasing, reaching more than US$100 billion in 2005
2. The GDP growth of 5.9% in 2004 and nearly 5% annually since, have performed better over the past 2 years then they have over the past 20 years, surpassing the average for the world economy for the first time in 25 years
3. In 2006, Latin America surpassed all other emerging markets with total cross-border deal value representing over US$102.6 billion, an increase of 154% on 2005.

Mining in Colombia began in the 1500s. Precious metal and stone mining was still carried out in the late 1980s. Gold was the most important metal in terms of short-term revenues. With the discovery and exploitation of large coal and natural gas reserves, the role of mining in the national economy expanded in the late 1980s. Mining and energy related investments have grown because of higher oil prices, increased demand and improved output. Other important metals in Colombia include platinum and silver, as well as been a major producer of emeralds.
Colombia’s impressive gold endowment and high exploration potential is widely recognized, with historic production believed to exceed 120 million ounces. Recent government-led improvements in security, infrastructure, and mining law reform are providing an ever improving environment for foreign investment in mineral exploration and development.

Government efforts to expand mining in Colombia were needed to encourage private sector investment. The government set a policy of developing infrastructure (roads, electricity, and communications), providing technical assistance, and encouraging sound credit and legal policies to minimize problems with land titling.
Colombia has since made major improvements to its infrastructure. The deregulation process that began in the early 1990’s emphasized modernizing infrastructure in specific areas that are key to attaining global competitiveness.
Through joint ventures and the promotion of small mining companies, the mining sector can contribute more to national employment, income, and wealth.

Have a great evening!

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