Colombian Update : What's New (s) : Gold Miners - Caught in the Sandwich

DISGUST

I had no immediate plans to write anything today however events yesterday in the north of Antioquia have overtaken me and I woke up this morning and simply felt the need to put my thoughts into writing. Yesterday in the north of Antioquia, Yarumel to be precise, three young innocent geologists simply going about their work for Continental Gold were gunned down allegedly by dissident members of the FARC's 36th division - another 3 were wounded and 5 others very fortunately escaped unhurt, at least physically - the mental scars will be for a lifetime. Only a few days ago near Buritica where Continental have their signature operation one of their engineers was shot dead and another wounded - this time those captured were from the Clan de Golfo, whose roots are from the historic paramilitary groups although these days they are pretty much hiring guns from wherever they can. These actions have highlighted the complete failure of previous Governments to get a grip on the gold mining sector or to protect those who come to these shores to help exploit those assets, the same mountains where guerrillas successfully hid for decades are where these geologists ply their trade, walking or on horseback sometimes for days - they need to have the security such exploration entails. A friend who works closely with such geologists described his frustration and immense sadness at something that could have been avoided...the worst day of his professional career.....sums it up perfectly.

GOING BACK I have long had an affinity with Continental, I was a family and friends shareholder long before they listed in Canada and way back when I did the tour of the mine at Buritica watching in a amusement as the then major owner managed to bang his head on the roof of the mine at every conceivable opportunity - it was a mine with tremendous potential as the company labeled themselves as the first modern gold mine in Colombia. Their plans were ambitious but they worked in conjunction with the local community, offering work to those living nearby and constantly injecting money into the community be it a church roof or some such similar need - they were doing things the right way, they were there to make money of course but beforehand the project required and still requires hundreds of millions of dollars of investment. It is sensitive of course because even as you sent down the hill on the back of a donkey those guiding you would point out the overblown pot holes where since centuries before the local artisanal miners had been chipping away at the ground trying to make their fortune - or at least a living. At this time in Medellin (2008-2011 approx) there were gold mining offices to be found all over Medellin - Canadians, Australians and their locals representatives were everywhere, they all wanted to find funding, get listed and make their fortunes, I attended conferences and read how the gold reserves of Colombia were perhaps equal to those of Peru (perhaps 6-7th largest in the world) and how for 100's of years the sector could provide the funding for massive Government projects....the new gold rush, sadly it has taken on too much of the wild west over recent years. EPIC FAIL I am no geologist, a core sample looks like a nice multi coloured stick of rock to myself but you don't need to wear a hard hat to see what has gone wrong - this may be very broad strokes but I defy anyone to say I am not at least close.

• There is simply put no leadership from the Government, the mining ministry has changed hands on average very 10 months over the past decade and has often been the dispatch of a person completely unprepared for the position.

• Illegal mining is the new Cocaine for illegal groups, it may not be the Congo but as the image below shows there are similarities, again this takes place in the margins, places that the Government could get to and deal with but appear to not want to.

• Points one and two have led to an outflow of mining personnel to regions of the world where there is genuine Government support and the risks are lower.

• This outflow is only matched by the decline in inflows of capital to support the sector - a few years ago I could have reeled of 5-6 active companies and told you where they were exploring, the momentum has slowed.

The mining sector also falls through the legal loopholes when it comes to security. A few years ago 1000's of people arrived illegally on Continental's land in Buritica demanding all manner of things, compensation, a share of the pie etc. The issues at Government level was who was going to move them - the national Government said the regional Governor had to move them - missing the point perhaps that they have neither the resources or the legal reach to do this, the situation went on for weeks but fortunately was eventually resolved. Around the same time some artisanal miners manged to get themselves trapped underground at the same location - who were first on site and helped with the rescue using their equipment - Continental.

BROADER ISSUES It isn't just gold mining where there are issues in terms of oversight but we could be here for several days discussing that however it worth mentioned the many locally run coal mines that have Dickensian practices, explode or flood on a regular basis and then after a slap on the wrists are back in action. It has long been my opinion that each and every mining operation in Colombia should be run by international companies - locals have failed, the correlation been mining deaths and local operators tells us all we need to know. The foreign companies have been key in implementing best practices across the mining sector and they need to be viewed as leaders of the process going forward until such time as local players prove they can behave correctly.

IN HONOUR OF The deaths of Oscar Alarcon, Henry Martinez, Camilo Tirado and Laura Florez should be treated as a watershed moment and in their memory this should be a turning point. Since the peace agreement with the FARC, illegal armed groups have sprung up like weeds - the Government needs to fill in those parts of the countryside where the rule of law is losing or lost its ways, President Duque during his campaign spoke of his support of the mining sector - it is time to act before more innocent lives are taken. There are a lot of sensitivities around the sector - what constitutes an artisanal mine and what represents an illegal mine but there has been enough common sense around to work around this thus far, the Government needs to now legislate clearly as to the exactly what the rules are and allow this incredible natural resource to be exploited correctly.