In July 2013 the company and a strategic partner applied for open ground sitting over the Gramalote Deposit and surrounding areas. The open ground was identified from official government records. The Gramalote Deposit contains 2.5 Million ounces of gold in the total and measured categories grading 0.81 g/t gold at a cut off of 0.25 g/t gold (source B2Gold Corp 43-101 Technical Report dated June 8, 2012). The deposit is held in joint venture between AngloGold Ashanti (NYSE:AU) and B2Gold (TSX:BTO, NYSE:BTG). According to media reports in Colombia the environmental permit has been issued which is a major step forward to mining. A link to the Environmental Impact Assessment (in Spanish) is below and outlines information on production, capital costs, etc.
According to the EIA the capital costs of the Gramalote Project will be on the order of $1.1 – $1.2 Billion, which includes two deposits, of which the Gramalote Deposit is noted to have 85% of the resources. At maturity the project will be producing an average of 400,000 ounces of gold per year, for a total production of 3,651,000 ounces of gold over 9 years. The project has a mineral resource of 5 Million ounces of gold, possibly increasing to 7 Million ounces of gold adding to it overall potential.
The application over the Gramalote Deposit was applied for and subsequently denied by the Secretary of Mines in the state of Antioquia. Zonte and its partner have retained Colombian legal counsel and are contesting this outcome. Legal counsel is of the opinion the application was not processed in accordance with the Mining Code 685 of 2001. Two of the main reasons the Secretary of Mines provided for denying the application were; (i) area was too small to become a mine and (ii) it would interfere with the large scale mining operation of Gramalote Colombia Limited (JV between AngloGold and B2Gold). Legal counsel notes that the mining code does not specify a minimal size for titles and does not reference minimal sizes for titles. According to legal counsel, the mining code is clear; it’s a first come, first serve for open areas with no minimum size and a maximum size of 10,000 hectares. The case is now in the court system, awaiting trial.
One of the open areas that have been applied for is illustrated in the image below. The total application covered a larger area and the Secretary of Mines noted there are 29.8 hectares of open areas within the application, 17.8 hectares being over and near the Gramalote Deposit, which illustrated below. As seen in the image below the open area is continuous with an open area sitting over the deposit and between titles measuring 21 metres in width and nearly 600 metres in length and 13 metres in width and nearly 400 metres in length. These areas are also continuous with another open area just east of the Gramalote Deposit measuring 58 metres in width and just over 500 metres in length.
The Secretary of Mines noted there were three open areas in the application area totaling 29.81 hectares. The above area is about 17.8 hectares, leaving the other two areas to total 11.98 hectares.
The Company continues to seek opportunities in Colombia,as the country has exhibited considerable resource potential, despite the above mentioned issue. Company representatives have examined many properties throughout Colombia and been on over 120 properties. In the process, the Company has identified projects of interest and maintains an active list that could become targets for acquisition. The Company also continues to source and review opportunities through its network of relationships. To this end, the Company recently announced interest in an option agreement for Project X which has significant historic drill intercepts.