South African AngloGold Ashanti’s (NYSE: AU) CEO, Mark Cutifani, said gold projects in Colombia are one of the company’s key current priorities and that it has used its first-mover advantage in the country to build a strong position in what he called “the world’s most prospective new gold district.”
Speaking at the Denver Gold Forum, Cutifani said he recently appointed Charles Carter as executive VP of business in the South American country "to ensure appropriate strategy, alignment, resourcing and scheduling," as he wants those projects to move forward “as fast as possible.”
After his presentation, the executive —who is also the vice president of the South Africa’s Chamber of Mines— also referred to the employee unrest that continues to harm the local mining industry.
“We will find a solution in the next month or two; we’ll come together and redefine a pathway that seeks to answer the right issues, ” he told Ventures Africa.
“We’ve all got to work harder on the social issues; connecting and communicating better with the workforce is important,” Cutifani was quoted as saying. “The union has to also have a look in the mirror and think about its processes to improve the way it’s connecting.”
AngloGold has three main projects in the country: the 100% owned La Colosa, and Gramalote and Quebradona, both of them in partnership (51%:49%) with Canadian B2Gold (TSX: BTO).
"Colombia is investor friendly with strong government institutions, evolving mining legislation and strong interest from majors," Cutifani said, adding that the company has resources of approximately 30Moz at a net cost of $2/oz. in the country.
La Colosa has significant growth potential and the final scope of the project has still to be determined. The ore body is currently being tested at depth to 1,000 m while drilling to the northwest of the concession area shows improving grades (up to 1.9g/t).
Anaima Toche, which surrounds La Colosa and is also controlled by AngloGold, has potential to become a new mining district, according to Cutifani's presentation.
La Colosa is expected to produce at least 700,000oz/y of gold and cost $3.5 billion.
Potentially Colombia's first open pit gold mine, Gramalote's prefeasibility stage is set to wrap up this year. The focus is on front-end engineering and design, land purchase, and environmental, social and community engagement, according to AngloGold.
A deal with local artisanal miners is approaching completion with 152 miners in the project area moving to self-employment or JV roles.
Gramalote should start producing in 2016 and there is potential to grow the current 4.1Moz resource, said Cutifani.
In terms of the Quebradona project, AngloGold is moving to increase its stake in the project from 51% to 70%.
Other operations of AngloGold Ashanti in Latin America include the 92.5%-controlled Cerro Vanguardia mine in Argentina, and the fully owned AngloGold Ashanti Brasil Mineraçao and Serra Grande mine in Brazil.
In the past year, investors, mining companies and explorers alike have been focusing on the South American country, but recent incidents that include a major strike, a new minister of mines and debated renewal of BHP’s Cerro Matoso nickel mine concession, are making foreign firms more cautious.
Colombia’s economy, which is Latin America’s fifth largest, has grown four times as rapidly as Canada’s in recent years, with foreign investment quadrupling between 2002 and 2008.