Zonte Metals mulling legal actions against Colombia after gold permit rejected

Zonte Metals mulling legal actions against Colombia after gold permit rejected

The project would sit on top of the Gramalote deposit and surrounding areas. (Courtesy of Zonte Metals)

Gramalote’s chances of becoming one of the first modern commercial scale gold mines in Colombia were placed on ice last year, after owners AngloGold Ashanti (NYSE: AU) and B2Gold (TSX: BTO) (NYSE: BTG) decided not to move forward on a feasibility study due to weak gold prices.

But a new project that would sit on top of the Gramalote deposit and surrounding areas, may bring new life to the area, as Canadian junior explorer Zonte Metals (TSX-V: ZON) is trying to persuade Colombian authorities to grant them a permit to operate.

According to the Nova Scotia-based company, by rejecting its application the Department of Antioquia did not process in accordance with the country’s mining code. This, as the request was rejected on the premises the area is too small to hold a mine (less than 30 hectares), but the mining code doesn't set a minimum size for projects in open areas.

However, Zonte and its local partners say they have been several applications accepted where the total area of exploration was significantly smaller, including a recently issued title that covers less than 0.1 hectares.

“After initially being rejected, Zonte's partner petitioned the Secretary of Mines on a number of occasions to have the application processed in accordance with the Mining Code. Although these petitions are required to be answered within a specific time frame, they typically went unanswered, or were answered months after the deadline,” the company said in a statement.

The company has high hopes for its project as Gramalote, located 110km northeast of Medellin, in the department of Antioquia, is reported to contain 2.535 Million ounces of gold in the total measured and indicated categories grading 0.81 g/t gold at a cut off of 0.25 g/t gold.