Underground miners at Colossus Serra Pelada gold-platinum project not striking

Approximately 30 to 50 members of Cooperativa de Mineração dos Garimpeiros de Serra Pelada COOMIGASP approached the entrance to Toronto-based Colossus Minerals' (TSX: CSI) Serra Pelada gold-platinum project in Brazil's Pará state on Sunday, July 21, 2013, the latter said in a statement to BNamericas asking for corrections on a story published on July 24. COOMIGASP members were seeking assistance to clarify who is in control of the cooperative, which represents their interests in the mine, the statement said. The latest election of the COOMIGASP executive was contested in court and overturned, and unfortunately the legal ruling was unclear as to who was left in charge. The members who approached the mine were peaceful and did not impact any of the mine activities, according to the Colossus statement. They stayed for approximately 48 hours and the gate was cleared by 2:00PM on Tuesday, July 23, 2013. Serra Pelada is a JV between Colossus and local miners cooperative COOMIGASP. The contract between Colossus and COOMIGASP states that the cooperative's equity stake in the Serra Pelada mine is 25% and the Colossus Minerals stake is 75%. The deal was brokered and endorsed by the country's mines and energy ministry MME, and publicly approved at a general meeting of the cooperative. The agreement resulted from Colossus Minerals agreeing to fund the entire costs for the development of the mine and construction of the process plant and for taking all technical and financial responsibility for the project implementation in return for an increase in its interest from 51% to 75%. According to the statement, the contract amendment was signed in November 2009. The ownership change also ensured a minimum holding for the cooperative, avoiding the dilution provided for in the original contract in the event that the cooperative could not fund their portion of the development, construction and implementation costs. Under the terms of the agreement COOMIGASP is paid 350,000 reais (US$156,300) per month as an advance on their profit interest until production at Serra Pelada commences. These funds are deposited in court under the Term of Conduct Adjustment (TAC) signed between COOMIGASP and the Public Prosecutors, with the consent of Colossus Minerals. The funds advanced are fully recoverable from future cash flows owing to COOMIGASP once production commences. Colossus Minerals has invested 560mn reais (about US$350mn) in project construction and exploration. On July 15, Colossus issued a press release stating production start-up would be delayed until late in the fourth quarter 2013. To read the full press release click here