AngloGold to explore in Colombia

5.06.06

www.businessday.co.za

Gold miner AngloGold Ashanti has formed a joint venture company with Toronto-listed Bema Gold to explore for gold in Colombia.

The venture underlines growing interest among South African miners in prospects in South America. Gold Fields recently bought a developing mine in Venezuela called Choco 10, and is developing another gold mine at Cerro Corona in Peru.

Harmony Gold CE Bernard Swanepoel said in February that the group was looking at gold mining opportunities elsewhere in Africa, in South America and in the former Soviet Union.

The depletion of local gold resources as well as the volatility of the rand has encouraged South African gold miners to search globally for new mines.

AngloGold said in its latest annual report that it continued with early-stage exploration in Colombia last year. It drilled one target with negative results and said it would follow up and testdrill many targets this year.

AngloGold and Bema Gold have agreed to form a company to explore a select group of AngloGold’s mineral opportunities in northern Colombia.

Initial focus will be on La Mina and El Pino. La Mina is a gold and copper porphyry system, a type of rock formation containing crystals. El Pino is an epithermal deposit, which means it consists of veins of ore that are formed deep in the earth.

AngloGold will put at least eight mineral properties into the new venture and Bema Gold will spend at least $5m on exploration.

The new company can obtain up to 51% of any property that AngloGold farms out to it by drilling at least 3000m and matching AngloGold’s prior exploration spending.

Within two years the new company would be listed on “a recognised stock exchange” and AngloGold and Bema would each hold a 20% interest in it.

Bema Gold said Colombia had produced about 120-million ounces of gold in the past. Recent government-led improvements in security infrastructure and mining law had made the climate for foreign investors in mineral exploration and development more attractive, it said.

Bema Gold’s main focus is its Kupol project in Russia. It owns 50% of the Refugio Mine in Chile and Petrex Mines on the East Rand. It recently signed a memorandum of agreement with empowerment group Pamodzi Resources.

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