Friday, November 24, 2017

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Roberto Peckham

For more than 150 years, Antioquia has been Colombia’s biggest gold producer -- and in-development projects are likely to keep it that way.

However, the 320 delegates to the second annual Colombia Gold Symposium (CGS) here in Medellin November 14-15 also heard warnings on real and potential threats to growth -- with environmental issues potentially surpassing the historic problems of violence in gold-mining areas.

The most highly-publicized current battle in Colombia against proposed gold mining isn’t in Antioquia, but rather in neighboring Santander, where the citizens of Bucaramanga (population 522,000) are trying to intervene in Minesa’s proposed US$1 billion “Soto Norte” project near the village of California, northeast of Bucaramanga. Water pollution is the claimed issue.

Minesa CEO Darren Bowden pointed out at CGS here that the Soto Norte project is among the top-five biggest gold-mining development projects in the world -- estimated to produce some 10 million ounces over the expected 25-year-life of the mine.

This project won’t employ toxic mercury nor cyanide, as all final processing will be offshore, not in Colombia, he said. This stands in contrast to the illegal mining in the area, to which Minesa will put a stop by converting illegal miners to work – cleanly, safely and properly -- in the proposed legal-mining operation.

“We guarantee that Soto Norte project will not affect the water that supplies Soto Norte and Bucaramanga,” Bowden said – flatly contradicting claims and legal challenges being raised by a local “green” non-governmental organization (NGO) and the mayor of Bucaramanga.

While the Soto Norte project currently is outside the “paramo” highlands where all mining in Colombia is now banned, a recent Supreme Court decision would have government regulators redraw the “paramo” limits, possibly tripping-up the project.

Meanwhile, in Antioquia, global mining giant AngloGold Ashanti is trying to develop a gold-mining project near Jerico, Antioquia. But “changing social and political scenarios” have clouded the forecast outlook for development, as noted in a presentation here by AngloGold geology manager Pablo Noriega.

On the positive side, Medellin-based Mineros SA has a long-established reputation for socially and environmentally responsible mining (see: "Mineros SA Boosting Environmental, Social Projects," Medellin Herald, March 21, 2016), while Canada-based multinationals including Continental Gold and Red Eagle Mining are likewise emerging to share this positive limelight, earning high praise from local communities in Antioquia as well as from national and local government officials.

Meanwhile, Antioquia Gold president Gonzalo de Losada said here that his company’s in-development project at Cisneros, Antioquia, won’t employ cyanide -- and will be environmentally and socially responsible.

Similarly, Silvana Habib, the current president of Colombia’s national mining agency (Agencia Nacional de Mineria, ANM), touted here the emergence of many more socially and environmentally responsible mining projects -- as well as more-effective government control over criminal and irresponsible artisanal mining.

Properly titled, permitted, designed and executed mining projects are expected to triple legal gold production in Colombia over the next few years -- combined with “formalization” programs to convert artisanal miners to responsible miners, Habib told the CGS forum here.

What’s more, Colombia will have completely banned the use of mercury in gold processing in 2018 – a step already taken well in advance of 2018 by legal miners such as Mineros SA.

Meanwhile, the national government and Colombia’s Supreme Court have been enabling local municipalities and territories to ensure greater citizen participation in permitting -- prior to start-up of legal mining projects.

This emerging trend has in some cases has stopped major gold-mining projects -- such as AngloGold Ashanti’s proposed “Colosa” open-pit gold-mining project in Tolima, and Gran Colombia Gold’s Marmato project -- much to the consternation of Asociacion Colombiana de Mineria (ACM), the biggest national mining trade association.

In a presentation here, ACM executive president Santiago Angel revealed that 27 Antioquian municipalities now have an interest in banning mining, including Andes, Amaga, Amalfi, Betania, Caicedo, Cañasgordas, Caramanta, Ciudad Bolivar, Concordia, Fredonia, Hispania, Jardin, Jerico, La Pintada, Montebello, Necocli, Pueblorrico, Santa Barbara, Salgar, Urrao, Uramita, Tamesis, Tarso, Titiribi, Valparaiso, Venecia and Yondo.

More often than not, it’s the fear of water pollution that raises the hackles of local citizens and various “green” NGOs opposed to new mining projects, as CGS attendees heard here.

In a presentation here, risk-management consultant Don Clarke of Birsa International pointed out that people in many areas of Colombia aren’t familiar with environmentally and socially responsible mining.

“Green” NGOs “use emotional tactics, but [mining companies] use logic to respond,” which often isn’t effective, he added. “You need to get better on identifying the [local] issues and improving your speech,” he said.

Responsible Mining Abounds - Internationally

In a technical presentation here, mining hydrogeochemical consultant Patrick Williamson of Colorado-based Intera Geoscience and Engineering pointed out that environmentally responsible mining projects have been successfully undertaken around the world -- with the Golden Cross, New Zealand open-pit and underground silver/gold mine an especially outstanding example (see before-and-after photos, above).

That mine produced some 584,000 ounces of gold and 1.6 million ounces of silver from 5 million tons of ore between 1991 and 1998, according to Williamson.

“The [end-of-mining] closure components included a tailings storage pond, waste rock dump, pit, underground workings and cyanide processing plant,” Williamson explained in follow-up notes provided to Medellin Herald.

“Challenges during closure included net acid-generating waste rock and reactive walls in the pit; management of cyanide solutions from the tailings storage facility during consolidation; a very wet climate (almost three meters of precipitation annually); and the location of the site at the headwaters of the Waitekauri River,” he continued.

“One factor leading to the success of the Golden Cross closure was the participation of a broad stakeholders group, including local politicians, regulators, environmental groups, technical reviewers, local residents and the Iwi band of the Maori people.

“Local communities, government, NGOs, shareholders, institutional investors and financial institutions -- combined with stricter regulatory standards and international criteria -- have challenged mining companies to operate to higher and more effective water management standards,” he added.

In a post-conference interview, Williamson told Medellin Herald that recent mine projects in Utah and Arizona, for example, typically reach closure successfully – in stark contrast to the pollution emanating from mines in centuries past, where many miners were ignorant of pollution problems.

In South America, another outstanding example of a successfully operated-and-closed mine is the “Kori Kollo” gold mine in the altiplano region near Oruro, Bolivia, he said.

However, similar success stories about large-scale Colombian gold mines operated from start-to-finish unfortunately haven’t yet happened yet, as Colombia “is getting such a late start” compared to large-scale gold mining in Mexico or Peru, he added.

“Colombia might jump into large-scale [gold] mining without the experience of opening or closing mines,” he told us. “This requires good science.”

While responsible miners might avoid cyanide or mercury pollution, acidic and metal leaching into water supplies would represent the other major threats -- if best-practices aren't followed, he cautioned.

Fortunately, modern miners now can tap high-quality, best-practices guides such as the Global Acid Rock Drainage (GARD) guide endorsed by the industry-supported International Network for Acid Prevention (INAP), or the Mine Environment Neutral Drainage (MEND) program in Canada, he explained.

Best-practices guides have been developed by leading experts in major mining nations including Australia, Sweden, Canada and elsewhere, while “the Chileans have a really good one in Spanish,” he added.

“If you don’t do best practices, then you run the risk of leaching acid water and metals,” Williamson cautioned.

Modern miners must employ such best-practices in order to obtain regulatory permits and achieve a “social license” to mine from neighboring communities, he added.

Unfortunately, “a lot of people think modern mining is no different from [reckless] Colorado mining of more than 100 years ago,” he said. “There are so many misplaced concerns -- and some NGOs are just trying to scare people,” he added.

On a related front, the UK-based CDP Global organization has published a series of recent surveys that rank major mining companies by their actions to protect water quality.

“Of the mining and materials companies that reported to the CDP Global water report 2014, 64% found exposure to water risk in their operations,” Williamson noted.

In the latest 2016 CDP water report, AngloGold Ashanti got a fairly good “B” rating, while Anglo American Platinum (South Africa), Harmony Gold Mining Co Ltd (South Africa) and Royal Bafokeng Platinum Ltd (South Africa) all got the highest “A” ratings.

“Almost all (92%) responding companies [in materials/mining] have fully integrated water into their business strategies, the highest of any sector, and 77% of companies have board-level oversight of a water policy, strategy or plan,” according to the CDP 2016 report.

CDP’s clean-water industrial survey “acts on behalf of 643 institutional investors, representing US$67 trillion in assets. These investors use CDP water data to engage with portfolio companies, inform investment decisions and catalyze change,” according to CDP.

While most of the companies involved in new gold-mining exploration and development projects in Colombia are relatively small (“junior” grade) -- and hence aren’t included in the CDP survey -- “juniors can learn from the majors and adopt best-practices,” Williamson told Medellin Herald.

“The metrics [of responsible mining] can be applied to any company,” he concluded.


Medellin Mayor Federico Gutiérrez announced November 20 that the city’s enormously popular “Metro” public-transport network will add yet another zero-emissions aerial-tram “Metrocable” system -- helping to stem air pollution mainly caused by obsolete diesel and gasoline vehicles.

The 2.8-kilometers-long, COP$298 billion (US$99 million) “El Picacho” aerial tram is due to start construction in 2018 and then start-up in late 2019 or 2020. France-based Poma -- which has built Medellin's other aerial tram systems -- won the competitive bidding for the project.

While most of the residents that must abandon nearly 400 homes to make way for construction of the new "Picacho" route have agreed to move, the city still hasn’t gotten 100% approvals, which could delay completion.

The “Picacho” line would serve about 160,000 people living in the working-class Northwest neighborhoods of Castilla and Doce de Octubre.

That line will join Metro’s existing electric-powered Metro rail system, an expanding electric-powered “Tranvia” road-tram network, the “Encicla” zero-emissions bicycle system, and the low-emissions, natural-gas-fueled “Metroplus” bus rapid transit (BRT) systems. The “Metroplus” BRT system also could be converted to zero-emissions electric power over the coming decade following initial tests underway on Metro’s first electric-powered bus.

Medellin gets virtually all its electric power from zero-emissions hydroelectric dams, with Medellin-based power utility EPM expanding capacity with the 2.4-gigawatt “Hidroituango” hydropower plant partially starting-up in late 2018.

Exito, EPM Expand EV Recharging

Meanwhile, Medellin-based multinational supermarket giant Exito announced November 21 that it’s opening the first two of a series of public electric vehicle (EV) recharging stations in Medellin – initially at the Éxito Poblado supermarket and at the “Viva” mall in the Laureles neighborhood.

While only a handful of EVs exist in Medellin to-date, local car manufacturer Renault (and its joint-venture partner Nissan) is one of the world’s leading makers of mass-market EVs -- mainly in Europe, so far. However, Renault has been boosting promotional sales of its “Twizy” mini-EV here in Medellin and could expand to more EV models in future.

“In the next few months, we will add two more [EV] charging stations at Éxito Envigado and Viva Palmas” in metro Medellin, added Claudia Echavarría Uribe, corporate affairs director at Grupo Éxito.

On the same day, EPM announced that it will have 20 EV recharging stations installed in metro Medellin by end-December 2017. That total includes the two new recharge stations involving Exito as well as a just-opened recharge station at the El Tesoro mall.

Additional EV recharge stations coming over the next month include Santafé mall, Unicentro mall, Los Molinos mall, Florida Parque Comercial, Mayorca mall (Sabaneta), Puerta del Norte (Bello); Viva Envigado, Plaza Mayor, Primer Parque de Laureles, Centro de Negocios Milla de Oro and Mall Río 10, according to EPM.


Colombia’s corporate oversight agency (Superintendencia de Sociedades) announced November 17 that Medellin-based architectural engineering giant Arquitectos e Ingenieros Asociados (AIA) filed for bankruptcy reorganization because of likely delays in paying creditors next year.

According to the Superintendencia, AIA reported revenues of COP$179 billion (US$59.6 million) at year-end 2016 and net income of COP$8.796 billion (US$2.9 million).

“The company requested the reorganization process, invoking the inability to pay imminently,” according to the Superintendencia. “That is, the company’s own projections suggest that it could stop paying its obligations next year.”

Superintendencia director Francisco Reyes Villamizar pointed out that AIA is one of Colombia’s most famous architectural engineers and construction companies, having participated in major infrastructure works such as the Bogota-Villavicencio superhighway and Medellin’s inconic María Luisa Calle cycling stadium, among many other big projects.

“The objective of the reorganization is to preserve the company as a productive unit and a source of employment generation,” Reyes added.

“Among the causes of the business crisis is a lower-than-expected behavior of the [Colombian construction] sector and a lack of working capital,” according to the Superintendencia.

“Upon admission to the insolvency regime, the company must refrain from making patrimony transfers that are not included in the ordinary course of business or making payments or arrangements outside the process,” the agency added.


Medellin-based multinational personal-hygiene products maker Grupo Familia announced November 15 that its third quarter (3Q) 2017 net profit dipped to COP$44 billion (US$14.6 million), down from CP$51 billion (US$16.9 million) in 3Q 2017.

However, for the first nine months of 2017, Familia’s net profit has more than tripled, to COP$159 billion (US$52.8 million), compared to COP$41 billion (US$13.6 million) in the first nine months of 2016.

Sales in 3Q 2017 rose slightly year-on-year, to COP$579 billion (US$192 million), while taxes also rose in the latest quarter, to COP$24 billion (US$7.9 million), from COP$19.9 billion (US$6.6 million) in 3Q 2016.

Familia – founded in 1958 as a family company – operates in 23 countries in Latin America, with four manufacturing plants in Colombia, one in Ecuador, one in Argentina and one in the Dominican Republic.

Its brand names include “Familia,” “Pequeñin,” “Petys,” “Nosotras,” “Pomys” and “Tena.” Product lines include toilet paper, facial tissues, diapers, feminine hygiene products, creams, shampoos, pet-cleaning products and industrial hygiene products.


Antioquia Governor Luis Perez announced November 15 the signing of a memo of understanding that would clear the way for starting construction in March 2018 of the US$600 million “Puerto Antioquia” ocean-freight port near Turbo.

Signing the memo were the Antioquia departmental government and its Instituto de Desarollo de Antioquia (IDEA) investment agency, France-based CMA Terminals, Colombia port operator/investor Pio SAS, banana export trade association Augura, the Sociedad Puerto Antioquia and the municipality of Turbo, Antioquia.

IDEA and the Antioquia department will put-up 5% of the funds for the project, due for start-up in second-half 2020, according to Governor Perez.

The new port not only would expand capacity for Colombia’s banana and coffee exports, but also will add new capacity for general containerized freight, bulk products and automobiles, at an estimated 6 million tonnes per year initial capacity.

At the signing ceremony, Colombia’s Transport Minister German Cardona Gutiérrez pointed-out that the national government’s COP$13 trillion (US$4.3 billion) current investment in “fourth generation” (4G) highways including the “Mar 1” and “Mar 2” highways and the “Toyo" tunnel -- linking Medellin to Atlantic ports (including the future Puerto Antioquia) -- are crucial to the economic future of Antioquia.

The deadline for financial close on the project is January 31, 2018, according to the governor.


Medellin-based insurance and pension-fund giant Grupo Sura announced November 15 that its third quarter (3Q) 2017 net income fell 11.6% year-on-year, to COP$460 billion (US$152 million).

For the January-through-September nine months 2017, net income fell 26.6% year-on-year, to COP$1 trillion (US$331 million).

The decline came “mainly due to a negative impact of the [Colombian peso/U.S. dollar] exchange rate as well as non-recurring provisions recorded during the first half of the year,” according to Sura.

“Were we not to take into account the aforementioned effects, the parent´s net income would have dropped by just 0.3% based on the levels of operating performance obtained by its subsidiaries and the amount of revenues obtained from associates via the equity method.

“Nevertheless, our subsidiaries continue to secure significant levels of growth thereby reinforcing their competitive standing in all those countries in the region where we are present while maintaining positive levels of operating performance in the core lines of business,” according to the company.

The Suramericana insurance division saw earnings before taxes rise 3.5% year-on-year “thanks to a good level of performance from its regional operations as well as higher contributions from all those businesses acquired from RSA, which are now offsetting the increase in interest expense and amortizations incurred with this acquisition” according to Sura.

However, Suramericana’s net income fell 9.4% year-on-year, to COP$393 billion (US$130 million), “mainly due to higher income tax,” according to the company.

At the end of 3Q 2017, Grupo SURA’s consolidated financial liabilities rose 5% year-on-year, to COP$10.2 trillion (US$3.3 billion), including a US$191 billion bond placement in February 2017 as well as a separate US$350 million issue of international bonds (for Sura AM division) in April 2017, “for the purpose of replacing its liabilities and improving their maturity structure,” according to Sura.

The corporate segment, as recorded in Grupo Sura´s consolidated income, includes Grupo Sura, Suramericana and Sura AM. “This segment includes the amortizations relating to the acquisition of the former ING operations, which in no way affect cash,” according to the company.

However, this consolidated statement “does not include the amortizations carried out with regard to the acquisition of the former RSA companies, since these are directly posted in the non-life segment. The main changes to this segment for this past quarter consist mainly of the effect of the exchange rate on the dollar-denominated debt carried as well as the derivatives held by Grupo Sura and SuraA AM to hedge said debt,” according to the company.

Insurance premiums for 3Q 2017 rose by 8.8% “thanks to the level of performance secured by the different segments throughout the region, with life insurance accounting for more than half of this increase,” according to Sura.

“Likewise, the auto [insurance] solution continues with its good dynamics in the region, driven by the signature in September of a new agreement with UBER in Mexico,” the company added.

Completes Mexico Internal Swap Deal

Also on November 15, Sura announced that the Suramericana insurance division completed the buyout of the Mexican life-insurance portfolio formerly belonging to Sura Asset Management.

“Suramericana, with 73 years of experience in the insurance industry, shall be extending its portfolio to cover the aforementioned insurance interests held in Mexico,” according to the company.


Medellin-based multinational supermarket giant Grupo Exito reported November 14 that its net loss for third quarter (3Q) 2017 came in at COP$31 billion (US$10 million), a big improvement over the 3Q 2016 net loss of COP$100 billion (US$33 million).

Net revenues grew 8.5% year-on-year, to COP$13.9 trillion (US$4.6 billion), while gross profit improved 5.3%, to COP$3.1 trillion (US$1 billion).

Recurring earnings before interest, taxes, depreciation and amortization (EBITDA) rose 5.5% year-on-year, to COP$670 billion (US$222 million), according to the company.

For first the nine months of 2017, net income rose to COP$30 billion (US$9.9 million), up sharply from a net loss of COP$148 billion (US$49 million) for the first nine months of 2016, the company reported.

The company’s expansion beyond Colombia into Brazil, Uruguay and Argentina is paying-off, with system-wide synergies now expected to deliver more than US$50 million in savings, according to Exito.

“The results in third-quarter 2017 keep us confident about the strategy followed on each of the countries in where the company operates,” said Exito CEO Carlos Mario Giraldo.

“In Brazil, we highlight the positive figures and growth of the food business through ‘Assaí,’ ‘Extra’ and ‘Pão de Açúcar’ [store brands].

“In Colombia, the expansion of ‘Surtimayorista,’ the innovation with ‘Carulla Fresh Market’ and the cost-cutting strategies will create differentiation in the long-run.

“In Uruguay, the convenience format with ‘Devoto Express’ continues as a strong contributor to results, and in Argentina, we see evidence of economic recovery and a real estate business that continues to contribute to the results,” Giraldo added.

The Latin America integration strategy includes “18 initiatives across the four countries, mainly related to the launch of a renewed loyalty program in Brazil, the exchange of best practices between Colombia and Brazil in supply chain to reduce shrinkage in perishables, and other synergies derived from the ongoing integration process between countries,” according to Exito.

“The gradual decrease of interest rates in Colombia and Brazil may lower financial expenses and trigger consumption levels,” while Exito also expects a “mid-term economic recovery in Colombia, Brazil and Argentina.”

Meanwhile, the company will focus upon "cost and expense control activities” and maintain an “expansion focus on high-return formats such as cash-and-carry in Brazil and Colombia.”

Exito also foresees a “high potential from store conversions and renovations of premium stores,” according to the company.

In Colombia, Exito forecasts that its capex spending this year will hit about COP$300 billion (US$99 million). Strategic priorities in Colombia include “focusing on cost and expense control activities and in profitable expansion to maintain profitability” as well as “strengthening the differentiation of textiles, the ‘fresh’ model from' Super Inter,' and private-label penetration to defend the company’s market positioning and to improve sales volumes in the country.”

A recently announced “Puntos Colombia” loyalty program “may improve the company’s strength for traffic monetization in the near future,” the company added.

In Colombia, Exito this year plans to open “25 to 30 stores in profitable formats, mainly in mid-sized cities to avoid cannibalization, including eight cash-and-carry stores, for a sales expansion of nearly 35,000 square meters,” according to the company.

As for real estate projects, “expansion of Viva Malls will represent an additional 120,000 square meters of [retail leased space] in 2018,” according to the company.

In Brazil, strategic priorities this year include opening five new “Assaí” stores and converting 15 other stores to this format.

Another 40 Brazil stores will continue to adapt the “Colombian textile business model,” while recurring EBITDA margin will rise to about 5.5% in the food segment, “derived from higher profitability in ‘Assaí’ and stability in ‘Multivarejo,’” according to Exito.

In Uruguay, Exito plans to add another 10 to 15 “Devoto Express” stores this year, while in Argentina, strategic priorities include adding another 35.000 square meters of leased retail space over the next two-to-three years, according to the company.


Medellin-based construction giant Construcciones El Condor reported November 14 that its third quarter (3Q) 2017 net income nearly doubled year-on-year, to COP$15 billion (US$4.9 million), from COP$8 billion (US$2.6 million) in 3Q 2016.

Operating income also jumped in the latest quarter, to COP$262 billion (US$87 million), from COP$163 billion (US$54 million) in 3Q 2016. The company credited gains from the sale of its interest in the Opain airport concessionaire to Grupo Argos for part of the improved results.

Conconcreto Results Dip

Meanwhile, Medellin-based highway construction specialist Conconcreto reported November 15 that its 3Q 2017 net income fell 46.6% year-on-year, to COP$33 billion (US$10.9 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) fell 18.9%, to COP$127 billion (US$42 million).

The downturn for Conconcreto reflected slower growth in the Colombian economy this year, resulting in construction slowdowns, according to the company.

Meanwhile, Conconcreto reported a construction order backlog with a total value of COP$2.59 trillion (US$859 million), equivalent to 2.4-years of work.


Medellin-based construction, electric power and cement giant Grupo Argos announced November 14 that its third quarter (3Q) 2017 consolidated net profit grew 38% year-on-year, to COP$452 billion (US$150 million).

Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) for 3Q 2017 rose 28% year-on-year, to COP$1.2 trillion (US$398 million).

Revenues soared by 253% “thanks to the sale of the Compas [ocean ports] shares, to the lots appraisal in the real estate business and to the positive results of all businesses,” according to the company.

“Grupo Argos now has a solid cash position for the closing of the quarter of COP$267 billion [US$88 million], and a reduction in the leverage indicators of 2.2 times the EBITDA, well below the 3.8 times obtained in the same period last year. Both indicators give flexibility to the holding company to develop its strategy of capital allocation and active management on investments,” according to the company.

Grupo Argos is the multinational parent company of Cementos Argos, Celsia and Odinsa, all based in Medellin.

“The cement business showed a positive growth dynamic especially in the United States, which along with significant advances in operational efficiency in all geographies allowed us to show the best figures of the year, with an adjusted EBITDA of COP$428 billion [US$142 million], equivalent to 19.5%, if non-recurring expenses are excluded,” according to Grupo Argos.

“In the energy business, on October 26 [2017], Celsia announced an issuance of common shares and a public offer of acquisition of up to 14% of the Epsa shares. Both operations [Celsia and Epsa] are supported by Grupo Argos, as they will strengthen the energy business and offer greater transparency to the market regarding the capital structure of the holding.

“In terms of the [highway and airports] concessions business, we are confident with the stock market Odinsa strategy, a Grupo Argos road and airport concession company. As shown by the results, we issued bonds for COP$400 billion [US$132 million], with an oversupply of 2.3 times what was offered, making it the first issuer of the sector which in the last 10 years issued securities in the market with an AA- rating.

“Odinsa also achieved the first disbursement and final closure of its US$250 million loan for the construction of the Pacifico 2 highway, under the fourth generation [4G highway] concessions program,” the company added.

During the latest quarter, Odinsa’s revenues were COP$200 billion (US$66 million), up 9% year-on-year, thanks to “stability in the growth of vehicle and passenger traffic, with increases of 3% compared to the same period of 2016, with 73,000 vehicles per day on road concessions, while consolidated from January to September [Odinsa] registered 27 million passengers at airports.”

As for cement operations, “the results for Argos confirm the recovery shown as of June of this year. The EBITDA margin of 19% reached in the third quarter is the same achieved during 2016. This has been achieved thanks to a 17% growth in cement volumes compared to the same period last year, the recovery in the Colombia and competitive efficiencies through the ‘Best’ program,” according to Argos.

In energy, “Celsia obtained revenues of COP$785 billion w[US$ million] with an EBITDA of COP$294 billion [US$97.5 million], an increase of 20% compared to the same period of 2016, and reached an EBITDA margin of 37%,” according to Grupo Argos.

“During this period, the entry into operation of the Celsia Solar Yumbo project stands out, which represents the first of the projects announced by the company to develop a portfolio of non-conventional renewable energy generation in excess of 200 megawatts.”

In real estate, Grupo Argos reported the deeding of 19,000 square meters and COP$29 billion (US$9.6 million) of revenue from sales of lots. Accumulated income from January to September for the sale of lots amounted to COP$221 billion. The company’s participation in the “Pactia” real estate fund “has had a growth in the value of the unit with effective annual yields of 7.7%,” the company added.


Medellin-based gold mining giant Mineros SA reported November 14 that its consolidated third quarter (3Q) 2017 operating income rose 14% year-on-year, to COP$589 billion (US$195 million), while net income rose 7.46%, to COP$91 billion (US$30 million).

In its mainly alluvial mining operations in Colombia, Mineros SA’s net income rose a slight 0.7% year-on-year, to COP$93 billion (US$30.8 million), while operating income dipped 0.1%, to COP$290 billion (US$96 million).

Colombian mining operations saw a 0.1% dip in production, combined with a 3.5% decline in the price of gold as measured in Colombian pesos, the company noted.

Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) rose 9% year-on-year in the latest quarter, to COP$193 billion (US$64 million).

In the “Hemco” division in Nicaragua, net income rose 174% year-on-year, to US$11 million, while operating income rose 38%, to US$101 million.

The Nicaragua division saw production rise 33% year-on-year, but EBITDA margin was better in Colombia, at 47%, versus 23% in Nicaragua.

Gran Colombia Gold Results

Meanwhile, Toronto-based Gran Colombia Gold on November 13 posted a US$1 million net loss for 3Q 2017, down from a net profit of US$8.1 million in 3Q 2016

Commenting on the report, Gran Colombia CEO Lombardo Paredes Arenas pointed out that the 42-days-long miners’ strike in Segovia, Antioquia, cut gold output 5% year-on-year.

Despite the strike, “we demonstrated our resiliency once operations returned to normal in early September, rebounding with two of our best production months this year,” Paredes said.

“We have since signed some new contracts with small mining cooperatives in Segovia and negotiations are continuing with the rest. We now believe our 2017 gold production will total between 165,000 to 170,000 ounces.”

However, year-to-date gold production of 122,122 ounces is up 12% over the first nine months of 2016, he added.

Revenue so-far this year is up 8% year-on-year thanks to higher gold production, worth US$144.4 million. However, output disruption during the strike, combined with a 4% decline in world gold prices, contributed to a 17% year-over-year decline in 3Q 2017 revenue to US$42.7 million.

“With Segovia’s operations back to normal and spot gold prices in October and the first half of November generally above $1,270 per ounce, Gran Colombia is expecting stronger revenue performance in the fourth quarter of 2017,” according to the company.

Gran Colombia’s 3Q 2017 total cash costs averaged US$748 per ounce, while its all-in sustaining costs (AISC) averaged $970 per ounce, “reflecting the adverse impact of the reduced level of production on fixed costs and capital spending on a per-ounce basis,” according to the company.

Red Eagle Results

Meanwhile, Vancouver, Canada-based Red Eagle Mining – developer of gold-mining operations in Antioquia, Colombia -- reported November 15 a US$5 million net loss for third quarter (3Q) 2017, down from a US$568,000 net loss in 3Q 2016.

Net losses so far this year total US$11.9 million, compared to a net loss of US$1.2 million for the first nine months of 2016, according to the company.

“The net loss increased compared to the 2016 period primarily due to increased expenses associated with the ramp-up of the San Ramon gold mine and mill during the 2017 period, which also resulted in the increased values of total assets and shareholders’ equity,” according to the company.

“Underground development at the San Ramon gold mine continues to advance according to plan with 1,756 meters completed in the third quarter, 438 meters in October and 4,493 meters completed year-to-date.

“Stope mining operations resumed in October with 4,373 tonnes at 6.09 grams per tonne gold mined and stockpiled. Prior to the anticipated mill start-up in January 2018, Red Eagle Mining expects to have stockpiled 21,000 tonnes of ore.

"Upon completion, the additional development, infill drilling and back fill system will allow consistent production resulting in an estimated 50,000 ounces of gold produced during 2018,” according to the company.


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SILLETEROS PARADE 2016 by JOHN AND DONNA STORMZAND (click to enlarge)

MEDELLÍN PHOTOS by Gabriel Buitrago (click to enlarge)

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Medellin Herald is a locally produced, English-language news and advisory service uniquely focused upon a more-mature audience of visitors, investors, conference and trade-show attendees, property buyers, expats, retirees, volunteers and nature lovers.

U.S. native Roberto Peckham, who founded Medellin Herald in 2015, has been residing in metro Medellin since 2005 and has traveled regularly and extensively throughout Colombia since 1981.

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