Colombia pushes ahead with gold projects despite market slump
Miners including Red Eagle Mining, Continental Gold and Mineros are pressing ahead with gold projects in Colombia as the weakening local currency offsets slumping gold prices.
The Colombian peso has depreciated by 70% against the US dollar over the past 18 months, reducing costs for international miners who face gold prices that have fallen 15% to US$1,100/oz over the past 12 months. Energy costs have also fallen for miners as crude oil prices this week fell to US$30/b, a 12-year low.
Colombia's largest gold miner Mineros, meanwhile, negotiated a new labor accord with its unions, agreeing a 5.7% wage increase in addition to a 1.4mn-peso (US$430) bonus per worker, providing labor stability through 2017, according to Bogotá newspaper Portafolio.
Vancouver-based Red Eagle began construction work last year at its US$55mn San Ramón underground mine in Antioquia, the furthest along of Colombia's gold projects. San Ramón is scheduled to come online in the second half of this year.
Red Eagle, which is also developing Colombia's Vetas gold project, is expected to produce 50,000oz/y at cash costs of Cdn$596/oz (US$417/oz) over an eight-year mine life at San Ramón, according to the company website. San Ramón has reserves of 2.42Mt of 5.2g/t gold containing 405,000oz.
Also in Antioquia is Continental Gold's Buriticá gold-silver-zinc project, where the Toronto-based company is on track to complete a feasibility study this quarter and take a production decision in the second half. The deposit has inferred resources of 15.6Mt containing 4.5Moz gold, 14.7Moz silver and 91Mlb zinc.
Vancouver-based Atico Mining, meanwhile, is expanding capacity at its El Roble gold mine in Choco department, while Toronto's Royal Road Minerals is drilling at the La Golondrina gold mine in Nariño.
Other mining projects include AngloGold Ashanti's Gramalote and La Colosa deposits, Eco Oro Minerals' Angostura and AUX Grupo's El Gigante, although only Gramalote has secured an environmental license to date with a possible 2019 start-up date, according to Portafolio. La Colosa could face delays after Ibagué mayor Ricardo Ferro announced plans for a referendum due to opposition to the project, the newspaper reported.
Colombia's gold output rose 7.7% to 519,472oz n the third quarter, according to state mining agency ANM.
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