Interview: Paul Harris of Colombia Gold Symposium Breaks Down Recent Developments in Colombian Mining Sector
Mining has been a hot, and controversial, topic in Colombia this year. There has been a rise of popular referendums in which community votes have clouded the legal standing of various projects and left some international companies wondering what the future holds for operations in the country.
At the same time, two companies — Continental Gold, Inc. and Eco Oro Minerals Corp — have continued to make headlines for various reasons as their projects and internal activities move in new directions.
To learn more about some of these developments and what they mean for the future of gold mining in the country, Finance Colombia Executive Editor Loren Moss recently sat down with Paul Harris, a mining expert and proprietor of the Colombia Gold Letter.
His analysis has become some of the most insightful and sought after by those working in the mining industry in Colombia, and Harris is also the organizer of the upcoming Colombia Gold Symposium 2017.
One of the most anticipated annual events about the sector in Colombia, this year’s two-day conference from November 14-15 in Medellín will bring together leading mining executives and officials from Colombia and across the world.
Read an edited version of their conversation below or watch the video version here:
Loren Moss: We had a recent tragedy in Buriticá. At first, I was a little bit confused, I didn’t understand what happened. I know that Continental Gold had recently started to drill again, and my first thought just seeing the headlines was that it had something to do with that. But I guess luckily it doesn’t. What do you know so far about the recent explosion in Buriticá?
Paul Harris: OK, you’re right. It’s got nothing to do with Continental Gold’s exploration program — let’s be very clear on that.
As you may recall, a few years ago there was an invasion by illegal miners in the Buriticá area, and in 2016 the government went in and cleared most of those out. But there were still a few holdouts for various reasons. One reason is that some people just came back, and two, some people argued in the courts that they could manage to function there economically and legally and the courts listened to some of those people and said, “OK, you can stay.”
What happened was that the Continental security team, as part of their agreement with the government following the eviction of illegal miners, were doing their rounds — keeping an eye on things. And they found that, in one of the closed mines, there were people in there actively mining.
“Unfortunately, the vote in Colombia about mining was effectively put forward as, ‘Do you want life or do you want death?’ And obviously people are going to vote for life, but mining isn’t a death scenario.” – Paul Harris of Colombia Gold Symposium
So they went in to investigate, and from what I’ve picked up from news reports and speaking with the company is that people that were in the mine illegally reacted aggressively against their presence, set off some dynamite charges and also, according to news reports, began burning tires, and creating smoke, I guess so that they could escape. And so the people that were mining there illegally escaped but unfortunately the gasses that were a product from the burning tires and the explosion asphyxiated six of the security team.
Loren Moss: Continental Gold recently announced that they have started to drill again. I know that they have a mine there that’s active that’s still in the development phases. What does that mean exactly, for a layman? I would think that they’re drilling constantly, but I guess that’s not how it works.
Paul Harris: OK, so Continental has discovered a deposit. They have put together a mine plan and a feasibility study for that mine plan. And they have obtained all the permits from the government to develop that mine. So that’s still the main plan.
But while they ramp up for the mine development, they’ve got a big land package, so they’ve now started to focus again on exploration with the aim of finding more gold. The initial resource they’ve got is several millions of ounces. And they think there’s the potential on their property package to find several more million ounces.
So now that all the things are in place to build the Buriticá mine, they can now turn their attention again to exploring to find more gold. So, that’s the drill program that was recently announced, and now I think they’ve got two or three drills turning on the project now.
Loren Moss: Continental Gold seems to have very friendly relations with the local town there, Buriticá in Antioquia. But we’ve seen other mining companies have more complex and more complicated relationships. Perhaps we’re entering into a new phase. You’ve written about this in your own publication: these referendums. And about referendums people usually say, “Well, that’s a good thing. People have a right to determine.” But there are other issues there, and there are complexities there. It’s not so cut and dry, necessarily. Is this a new trend that we’re going to see in Colombia? Is it isolated? What are the ramifications, and what response can we expect to see in the future from these mining operations?
Paul Harris: That’s a very complex and almost complicated question to answer, Loren, and I think that communities want their voice to be heard. And that’s not just the case in Colombia, but throughout the continent, throughout the world. Communities want their voice to be heard, and oftentimes the processes that the government establishes don’t allow for that. And that’s not just for mining. That affects infrastructure projects, energy projects, large-scale projects of any nature.
Here in Colombia, there has been a disarticulation between the national government and local government, and the courts have endorsed the mechanism of the popular vote for communities to express their view on certain things, and mining is one of those.
Unfortunately, those kinds of votes — those kinds of interventions — tend to be boiled down to a binary question to which the community is asked to give a “yes” or “no” answer. Many things are far more multifaceted than a yes/no answer, and so saying “yes” to mining or saying “no” to mining has a lot of consequences beyond the immediately obvious, such as your future employment, future economic resources, social growth, and development. People are often not properly aware of all the issues and not really aware of what they’re being asked to vote for or against.
Loren Moss: I see, and certainly we’ve seen issues get hijacked. It’s about one thing, and it gets taken over by something else. I’ve seen that happen so many times in local government, and it happens in national government.
Paul Harris: Unfortunately, the vote in Colombia about mining was effectively put forward as, “Do you want life or do you want death?” And obviously people are going to vote for life, but mining isn’t a death scenario.
“Colombia can’t really afford to turn its nose up at the wealth of resources it has at its disposal.” – Paul Harris
Mining is, I would argue, a very positive — a very life-affirming — scenario that gives people the opportunity, that gives regions the opportunity for economic growth and development — obviously — if it’s managed well on a social, economic, and environmental level.
Loren Moss: Right. It’s necessary. We’re not, and probably will never be at a place where mining of some types of resources won’t be essential, and it can be done right. We’ve seen success stories both here and abroad, and I would imagine that those companies would do well to be very proactive in their relationships with the local communities.
Paul Harris: Absolutely. You have to lay out from an early stage the potential benefit. And by that, I mean what the growth and development benefit is for the local community.
And of course, we’re in Colombia, where the government has a lot of budgetary constraints and calls and demands. It’s got a peace process to pay for. It’s got all the demobilized fighters to pay for. It’s got all the resettlement to pay for. So Colombia can’t really afford to turn its nose up at the wealth of resources it has at its disposal.
Loren Moss: Right. And again, it’s also a diversification. It’s still a commodity, but it’s also a diversification away from the petrochemicals that the country has relied on in the past, like petroleum and coal.
Another mining company based in Canada, active here in Colombia is Eco Oro Minerals. They seem to have had a shakeup of some type. Their CEO has resigned completely from the board and everything. Is there any insight on what we know about those developments?
Paul Harris: I would say that’s not anything to be alarmed about because of the status that Eco Oro is in, meaning its life-cycle or development. My understanding is that the executive team were either not being paid or at much-reduced salaries.
And so the former CEO was basically taking a position with another mining company where he will be getting some full pay and actually be able to do some mining and exploration work, which is something Eco Oro hasn’t been in a position to do for quite a long period of time.
Loren Moss: Understood, understood. Once again, I want to thank you for taking the time with us now, as always. And for readers or viewers that are interested in mining — especially gold mining — once again, what is the link to your upcoming event?
Paul Harris: Well, the event is the Colombia Gold symposium. The website is ColombiaGold.co. It’s a two-day event. We’re going to have presentations from over fifteen companies with mining, development and exploration projects, including Continental. We’ve also got a very innovative copper session, and looking at some good innovations for the future.