Mining in Colombia
Colombia, is a mineral-rich country with a centuries-old mining tradition beginning in the 1500s. Colombia has produced about 94 million ounces of gold and, prior to the narco-terrorism that crippled the country beginning in the 1960's, was once the largest gold producing country in South America.
The "Plan Colombia" program was unveiled in 1999 to combat narco-terrorism, spur economic recovery, strengthen democratic institutions and respect for human rights. Alvaro Uribe was elected president in May 2002 (and re-elected in May 2006) on a platform to restore security to the country and he has had outstanding success. 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%.
Colombia is a free market economy with major commercial and investment ties to the United States, which accounts for about 25% of trade. New free trade agreements have recently been put in place with Canada and the United States, thus adding more to its already successfully growing industries. 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 many sectors to foreign investment.
Modern gold exploration began in the early 1990's with companies like Anglo-Ashanti acquiring large mining concessions. Anglo and its joint venture partner, B2Gold, control the most mineral title of any explorer, including the 24 million ounce La Colosa deposit.
AngloGold is planning to invest $250 million in Colombia during 2009-2012, $200 million of which will go into its La Colosa project, or "The Colossus," where the deposits were discovered in 2006. Today, at least 140 mining and exploration companies are active in Colombia including Barrick, Kinross, Iamgold, Rio Tinto and numerous junior exploration companies, many of which are private.
Based on the three field visits to Colombia, beginning in September 2009, as well as extensive geologic experience and research by the Colombia Crest Management team, the Company decided to focus on project acquisition within the "Middle Cauca Belt". The decision was based on the geologic potential for large gold deposits in the belt as well as proximity to infrastructure. Within the belt, there are significant mining districts, including La Colosa, Marmato, El Zancudo and Titiribi-Cerro Vetas. All are multi-million ounce gold districts with historic gold production.