Gold prices fall as news of huge gold discovery In Venezuela

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PostThu Oct 20, 2011 6:06 pm » by Savwafair2012

Largest New Gold Discovery In Venezuela

This was Venezuela eight years ago: so much untapped gold and silver, its production would influence spot prices. Copper, too.

This is Venezuela today: so much untapped gold and silver, its production would influence spot prices. Copper, too.

One of the geologists on my R-E-S-P-E-C-T list, Vicente Mendoza in Colombia, sent me his thoughts on the matter. I visited with Senor Mendoza, Venezuelan by birth, at Colombia’s El Marmato about 20 months ago. (Photo: Mr. Mendoza at El Marmato – Thom Calandra photo)

Vicente Mendoza’s geologic and social handiwork at what I call “the mess of ultra-rich El Marmato” puts him in league with the world’s leading VPs of exploration. In myestimado, anyway.

That tortured mountain, overrun with villagers slopping around its toxic dirt and river water, now has more than 13 M oz gold at 1 g/tonne and 75 M oz of silver at 6 g/t, the senior geologist says. Much of the proving up of the resource stems from Mr. Mendoza and his team at Gran Colombia Gold (TSX: T.GCM, Stock Forum).

I first met Mr. Mendoza years ago, when El Marmato was run by GCM predecessor Medoro Resources. Mr. Mendoza and his team, including Hernan Ortiz Delgado, go way back.

Hernan Delgado worked at Colombia’s Frontino mine in the 1970s and has written a book about the historic property’s veins and geology. In that book, one photo shows Senor Delgado and a Frontino team of miners with well-known structural geologist Richard Sillitoe.

Mr. Mendoza, a scientist in his own right and as gentle a geologist as ever I have met, presented (last time I saw him) a timeline on how then-Medoro would organize El Marmato, overrun with illegal miners and mercury-tainted soil and water.

The good senor also showed me details on how his team would continue to prove up millions of new ounces on the mountain’s lower half while planning for a possible new mine and open pit on the backside of the upper side. His plans included detailed capital expenditures and targeted new and existing areas of this patch of Colombia’s Middle Cauca mineral belt.

Thus far, nearly everything he said several years ago as far as exploration and production has happened. Alas, the villagers on the mountain are still “in process,” as they say.

The process takes years, it appears. Medoro and now-Gran Colombia have engineered a new town and incentives for all families at El Marmato. “The social aspect is always something very important in Latin America, and we respect how everyone here feels this is a part of their own life and soul,” Mr. Mendoza said at the time.

Gran Colombia is now Colombia’s largest gold producer, and with enough silver to issue plata-denominated notes. GCM also controls Zancudo at Titiribi, nearSunward Resources (TSX: V.SWD, Stock Forum). Gran Colombia’s portfolio includes that problematic but also gold-crazy-rich Frontino Mine at Segovia.

Back to Venezuela. Mr. Mendoza just told me something that I have to get into print: about the promise of his homeland. This, remember, is a country whose government has assumed control of most assets of value on behalf of the state.

“Hugo Chavez (Venezuela’s leader) is a nutcase and will soon kick the bucket, but he has left the country a total economic mess,” says Robert Moriarty Mr. Moriarty, like Mr. Mendoza a veteran goldie, says it likely will be years before any of Venezuela’s Canada-operated gold prospectors, stripped of their deposits in and around Brisas and Las Cristinas along so-calledKilometer 88 of the country’s Bolivar State, get a chance even of winning them back through ongoing court and inter-agency procedures.

Mr. Moriarty, a prospector and resources writer who is based on Grand Cayman Island, makes himself crystal clear within 10 seconds of saying anything. He relates that at least one of the companies involved in Venezuela before Mr. Chavez “expropriated” the metals properties was “bribing everyone in sight down there” and thus got its just karma returned in kind.
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