Gold mining is a game of numbers that need to add up to profit before any mining is done in the first place. If the price of gold is high enough, gold mining happens. In recent months gold prices have risen to historic highs while dropping quickly in recent days. In either case, the price of gold is high enough to mine and should remain that way for some time. If an investor can find a gold mining company at the right stage of development and extraction, profits can be made before gold prices move to far in the wrong direction.
Columbia Goldfields Inc., a gold exploration and development company, is currently working to mine and develop the Marmoto Mountain in the Republic of Columbia. Through acquisition and social resettlement, the company has plans of developing this mountain region into a premier gold mining district. Current initial estimates indicate the potential for a multi-million-ounce gold reserve.
The company is currently beginning its development and mining efforts through two mining operations, Zona Alta and Zona Baja. Zona Alta is currently finding excellent results with drill holes indicating inferred results of 2.6 million ounces of gold at a cutoff of 0.3 g/t of gold. These rates are supported by the Republic of Columbia through their independent testing facilities. Recovery rates are estimated at 92% and supported by Zona Baja actual results of 88% after full recovery efforts. Zona Baja (lower site) has been finding excellent results at its below-ground sites. Using a mill onsite, the operation has reported production of 25,000 ounces of gold per year. In recent weeks, the company has indicated that it will purchase Zona Baja for $35 million and transfer $9.5 million to begin the process. An offering will provide the remainder of capital for the final purchase.
Current commodity pricing has found gold prices falling as the US dollar begins to move off its lows. The company, however, has done a solid job of walking the fine line of price/operations balance. As the price of gold has run up significantly over the past year, this balance line may be far enough away that the company can benefit for the foreseeable future – depending upon costs. In either case, the company has located and begun the process of developing a potentially large gold find.
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