For those that may be interested in a more speculative gold play
(traded in Canada and on the Pink Sheets under the symbol TPRFF), below is an
excerpt from Chris Mayer’s book, World Right
Side Up. The book was published in early 2012, so I’m not sure if all
of this is still up-to-date, but the latest company presentation is available HERE.
I don’t own any shares and don’t know much about the company, but the story
seemed interesting enough to mention, and the stock has come down quite a bit.
El Dorado is one of my favorite historical Colombian stories. But there is a modern gold boom that echoes these past desperate efforts. As the New York Times reported:
The gold rush here is just a part of a broader mining boom in Colombia, with gold production climbing more than 30 percent last year and attracting an array of fortune seekers, from multinational corporations to farmers who have left their fields and picked up shovels.
Over 40 international mining companies were poking around Colombia's steamy basins looking for gold in 2011. By the end of 2012, Colombia could be at a run rate of 2 to 3 million ounces of gold annually—more than double what it produced in 2009. Miners are putting billions to work in Colombia to get its gold.
This is a nod to the world right side up, as Colombia was South America's largest gold producer until 1937. It has a long way to go before it catches Peru, the current leader. But Colombia could become a top-10 global gold producer in the next few years. As it is, Colombia ranks twenty-first in the world in gold production.
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One of my favorites is the largest Colombian gold miner, Gran Colombia (GCM:TSX).
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Serafino really stressed to me the importance of political and cultural factors in mine building in Latin America. “The mine is simple,” he said. “The harder part is convincing the politicians and the local people that you aren't here to take away jobs and mess up the environment.” That is why hiring CEO Araújo was so important. As mentioned, she has a star-studded resume. “She is a superstar over here,” Serafino told me. Family members have held the posts of minister, governor, and senator. She is a great asset at this stage in the company's development. In addition to political connections, it is important to have size and clout.
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As Gran Colombia ramps up production here, it will impossible for the market to ignore it. If Gran Colombia comes anywhere close to its goals over the next year, ramping up from 100,000 ounces in 2011 to 600,000 ounces by 2016, the stock will soar.
I should mention the free option in silver. Gran Colombia has nearly 60 million ounces of silver at Marmato. “There's a billion dollars' worth of silver here,” Serafino said.