Medoro Resources Ltd.
Gold mining always carries with it an element of risk, but for many years, some of the world’s most abundant gold deposits have been left untapped because the risk was simply too great for most companies. Medoro Resources Ltd. Corporate Manager Juan Carlos Santos says Colombia is one of the top-10 gold producing countries in the world and one of the most prospective for gold reserves, but its history of social, political and drug-related violence made it off-limits.
“The richest areas we have in Colombia were the ones where we had the toughest security issues,” Santos explains. “Colombia is very rich but highly unexplored.”
However, the violence and fear that defined Colombia for many years subsided thanks to a concerted national effort in the last decade.
Today, the nation is a much safer and stable place to conduct mining activities, and that has opened the door for projects such as Medoro’s Marmato Mountain project. The current principals of Medoro saw Colombia’s improvements beforehand and chose to bet on gold exploration and mining in Colombia, Santos explains.
Strong Prospect
While checking known gold reserves in Colombia, Medoro came across the Marmato gold district, located in the central portion of the country. Marmato has a long history of gold production, having first been mined by the Spanish more than 500 years ago.
“It was basically a very risk-free proposition to begin negotiating for the Marmato area,” Santos says.
Between October 2009 and February 2010, Medoro purchased and consolidated three mining concession areas at Marmato from the previous owners, totaling 1,198 hectares.
Marmato has a measured and indicated gold resource of 6.6 million ounces of gold in 226 million tons of material, and additional inferred resources of 3.2 million ounces of gold in approximately 116 million tons of material. Santos notes 160,000 meters of exploration drilling have already been performed, with another 50,000 meters expected to be drilled before the end of the year.
“The technical results are better than ever,” Santos stresses. “We’re talking about a pretty huge deposit, a world-class deposit.”
The site also has strong infrastructure in place, with a highway, important rivers and the national electric grid crossing the property. The local population has been mining the area for generations and has a 93 percent literacy rate, the company points out.
No Major obstacles
When viewed from a technical perspective, the Marmato project appears to be simple, relatively speaking. However, Santos says there are still some non-mining-related issues at Marmato that concern Medoro.
“No one doubts our technical decisions and information,” he stresses, noting that the company hasn’t found any environmental issues on the site.
“Our toughest challenges are basically social – we do not have major technical obstacles.”
‘Huge Project’
The most significant challenge for Medoro is the relocation of the urban area of the municipality of Marmato, which is located at the top of the
mountain.
The community is made up of more than 1,000 families who will need to be relocated for Medoro to begin open-pit mining.
After completing a census to determine the exact characteristics of the community to be relocated, Santos says, the company will build a brand-new town for those residents a few miles away from the mountain, complete with new utilities, at a cost of approximately USD $30 million.
“That’s a huge, huge project, and it would basically improve and revamp the life of the Marmato community forever,” Santos says.
Although it sounds as if relocation would be a major inconvenience for Marmato residents, Santos says it will in fact be a blessing.
Due to decades of unlicensed, informal and unrestricted mining in the area, dangerous chemicals and explosives have affected the local geography and population.
“This should be huge news for the Marmato community because we would relocate them from a pretty dangerous and uncertain area,” Santos says.
An Exciting Year
2011 is shaping up to be an exciting year for Medoro, and not only because of the Marmato project. The company currently is preparing a merger with fellow Colombian gold company Gran Colombia Gold Corp.
Once completed, Santos says, the merger of the two operations would create the largest producer of gold in Colombia and one of the big gold mining players in the region.
Santos explains that the merger is expected to be completed in the next few months, on top of the ongoing work at Marmato.
“So it’s going to be a pretty active year,” he says.