Continental Gold (TSX:CNL) is developing one of the richest gold projects in the world right now.
Their 100% owned Buriticá mine just outside Medellin, Colombia, has over 7 million ounces of gold and silver at very high grades (9+ g/t).
Some are speculating the project could grow to 20 million ounces or more.
“Buriticá is going to grow,” CEO Ari Sussman told me in Medellin on May 16, 2014 after giving me a tour of the project earlier in the day. “Both in measured and indicated and inferred, and if you look around the world today, if you look at the portfolio of every producing gold company, come 2015 or 2016, they all need to buy something.”
Experts we have consulted recently agree that 2015 and 2016 could be transformational years for the junior gold industry, and recent transactions including Osisko, Sulliden and now Papillon, suggests that some mining companies are also foreseeing a scarcity of high-quality available deposits.
Production at Buriticá is scheduled for 2017, but final permitting, which the company expects in mid-2015, is seen as its biggest obstacle.
With a small scale mine already on site and in operation since 1992, Buriticá has existing mining and environmental permits. What they need are a series of amendments to their environmental permit for their proposed operation.
Sussman tells me the environmental agency, Corantioquia, has a dedicated team for the Buriticá project. “So this is a mixture of hydrologists, engineers, geologists and other service people alike that understand what it means to permit a project responsibly. We have open dialogue almost daily with them.”
In a sign of the working relationship between Continental and Corantioquia, the company announced yesterday that they had received an ancillary amendment to their current environmental permit to do a 400 meter cross cut off the Veta Sur Ramp, transecting the entire Veta Sur vein package. A more detailed development update was provided in yesterday’s news release.
“Colombia does permit projects,” Mr. Sussman said in our May 2014 interview. “Colombia has a huge open pit coal industry. It has one of the world’s largest open pit nickel mines in production here. There are dozens of gold mines that are permitted here… These are all permitted mines with cyanide use and the communities are comfortable.”
“Colombia has the richest history of gold production in Latin America by far.”
Continental’s CEO is lucky in that his company has just under $100 million USD in its treasury which will last at least all of this year and next.
“We have ample money to continue exploring this project aggressively while simultaneously going underground. The primary focus of the underground development is initially to allow us to drill and expand and improve on the resource quality but eventually will serve as the haulage way for production.”
A lot of drilling, an additional resource estimate, final permitting, and a pre-feasibility study are on the agenda for Continental over the next 18 months, at which point the most advanced project in Colombia will reach a construction decision point.
If the project doesn’t get taken over, Sussman said Continental is well-positioned to proceed with mine building.
“We have the ability to build this mine and we are going on the assumption that we are building it.”
“We think we’re sitting on a camp that could in time grow to 20 plus million ounces of gold. There’s not that many camps like that globally anymore, at grade.”
“Everyone needs to come to Colombia. This is one of the best kept secrets of the world and we would love to have all of you visit our Buriticá project because it’s something pretty special and unique and will gain more notoriety as time passes.”
Price June 4, 2014: C$3.03
Shares Outstanding: 126.7 million
Shares Fully Diluted: 136.3 million
Market Cap: C$384 million
Contact: Investor Relations +1.416.583.5611
This article is for information purposes only. Author owns shares of Continental Gold and they are a sponsor company. Please read our full disclosure.