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Companies 318

Written by December 02 2019 0

Medellin-based textile giant Coltejer revealed in a November 30 filing with Colombia’s Superfinanciera corporate oversight agency that it inked a US$65 million debt restructuring deal with Grupo MCM Colombia.

The new debt deal carries a 10% annual interest rate and runs through December 31, 2021, according to the filing.

Coltejer and fellow Colombian textile makers have been ravaged by cheap Chinese textile and clothing imports in recent years, causing financial losses and sparking debt-restructuring deals.

The company posted a COP$9.9 billion (US$2.8 million) net loss for third quarter (3Q) 2019, an improvement over the COP$19 billion (US$5.67 million) net loss for 3Q 2018.

For the first nine months (January through September) of 2019, Coltejer accumulated a COP$35 billion (US$9.98 million) net loss, worse than the COP$32.7 billion (US$9.3 million) net loss for the first nine months of 2018.

Written by December 02 2019 0

Toronto-based Continental Gold – developer of the giant Buriticá, Antioquia gold mine due for start-up in 2020 – announced December 2 that China-based Zijin Mining Group inked a C$1.4 billion/US$1 billion deal to buy 100% of Continental’s stock.

“The offer price represents a premium of 29% over Continental’s 20-day volume-weighted average price at November 29, 2019 on the Toronto Stock Exchange,” according to Continental.

Newmont Goldcorp and directors and officers of Continental collectively holding 21.5% of the outstanding Continental common shares also voted to support the Zijin buyout.

Fujian, China-based Zijin -- formed in 1993 -- specializes in gold, copper, zinc and other mineral resource exploration and development through investments in China and nine countries. Listed on the Shanghai Stock Exchange and the Hong Kong Stock Exchange, as of November 29, 2019 Zijin had a market capitalization of approximately US$12.13 billion, according to the company.

Commenting on the deal, Continental CEO Ari Sussman said: “The all-cash offer at a significant premium to market is an excellent outcome for our shareholders and is a testament to the extraordinary effort of the Continental team and its stakeholders in pioneering a new and modern gold industry in Colombia.

“With [gold] production on the horizon in 2020, the timing is right for Continental to sell to a more experienced mine operator and therefore Continental’s board of directors recommends that shareholders vote in favor of the transaction.”

Zijin chairman Chen Jinghe added: “Continental’s 100%-owned Buriticá project in Antioquia, Colombia is one of the largest and highest-grade gold projects in the world and represents a highly complementary addition to Zijin’s international asset portfolio.

“The Buriticá project is expected to produce approximately 250,000 ounces of gold per annum on average over a 14-year mine life at life-of-mine all-in sustaining cost of ~US$600 per ounce. We believe the sizeable, high-grade mineral resource of 16.02 metric tonne [Mt] at an average gold grade of 10.32 g/t [grams per tonne] (being a measured resource of 1.40 Mt with a gold grade of 13.70 g/t and an indicated resource of 14.62 Mt with a gold grade of 10.00 g/t) presents excellent opportunities to expand production and extend mine life.

“Continental has successfully advanced and substantially de-risked the Buriticá project with commercial production now clearly in sight and first gold pour expected in the first half of 2020. Continental also holds a sizeable and highly prospective land package in Colombia that, combined with the Buriticá project, provides Zijin with the leading position in an emerging world-class gold producing region.

“Zijin is conscious of the demonstrated responsibility of Continental’s operation towards the well-being of the local communities and the responsible management of environmental aspects of its operation. Zijin will practice in all its operations the same commitment of Continental towards transparency and ethics and will continue to operate in a highly responsible manner in Buriticá, Antioquia and Colombia more broadly,” Jinghe concluded.

Written by November 29 2019 0

South Africa-based global mining giant AngloGold Ashanti on November 28 unveiled more details of its proposed "Quebradona" copper-gold mining project at Jerico, Antioquia -- including a novel "Biodynamic" nature park that would restore and improve the entire mining area, as part of its just-filed environmental impact assessment (EIA).

AngloGold first unveiled the scheme at the Colombia Gold Symposium (CGS) November 12 here in Medellin, where environmentally and socially responsible mining took front-and-center stage -- outshining even the usual presentations on geology, politics and legalities.

Why this scheme is so important: If the new, socially/environmentally responsible miners succeed in convincing a wider public, then Antioquia and Colombia could look forward to billions of dollars of new investments, big jumps in tax-and-royalty revenues, new jobs and business opportunities, infrastructure improvements, educational advancements, government fiscal solvency -- and even (amazingly) environmental progress.

The "Quebradona" project would become Colombia’s biggest copper-and-gold mine at pastoral Jerico, Antioquia – while actually improving the local environment via post-mining construction of a remarkable “Biodynamic” nature park.

The repercussions could be seen as almost biblical, as AngloGold potentially could become something like a 21st-century version of “Joshua” at the battle of Jerico -- where anti-mining walls could come tumbling down.

According to the company, "after a rigorous process that included more than 14 years of studies of the subsoil and on the social, economic and environmental characteristics of Jericho, Antioquia, AngloGold Ashanti began the process of filing the EIA with the environmental authorities of the departmental and national governments for the Quebradona copper mining project, with which the route to obtain the environmental license for the project begins.

"To construct the study, the company carried out exhaustive analysis and projections by 27 expert consultants in geology, hydrology, ecology, among other specialties. Also, between November 2018 and September 2019, AngloGold heard the concerns of more than 2,600 inhabitants of Jericho through 150 meetings, in order to raise solutions in the same document."

“The exhaustive analysis and dialogue with the community, together with the advanced technology that we plan to use in the project, allow us to have the certainty that the EIA not only integrates the components required by the authorities to ensure compliance with the technical specifications and social and environmental obligations of the project, but reflects high international standards of sustainable mining to ensure that it meets the purpose of converting the mineral wealth of the territory into social, economic and environmental progress,” added Felipe Márquez Robledo, president of AngloGold Ashanti Colombia.

In response to public concerns, AngloGold Ashanti integrated into the EIA a "gradual regeneration plan of 2,550 hectares of tropical dry forest and high mountain forest of Jericho," according to the company.

"The investment includes improving the connectivity of fauna and flora in the ecological corridor between the Cauca river, the escarpment area, the Piedras river, the Quebradona ravine basin, the integrated management district (Distrito de Manejo Integrado, DMI) of the Cuchilla-Jardín-Tamesis region, and the La Guamo ravine basin, in such a way that wildlife species recover mobility between ecosystems and increase native plant cover that will generate food and cover that can be used by birds in the region.

"The EIA also ratifies AngloGold Ashanti's commitment not to use the water that supplies the Jerico municipality. In the construction and operation [of the mining project], the company will use less than 1% of the [nearby] Cauca River water -- and recirculation [of that Cauca water] will be 80% in the process circuit," according to the company.

Worried environmentalists, some local farmers and some townspeople in Jerico have been fighting the proposed “Quebradona” mine for years, fearing potential water, air and noise pollution, ugly land subsidence and possible increases in local crime and prostitution. In addition, the politically powerful, Medellin-based "Comfama" social-benefits organization has expressed concerns that the new mine might cause undue pollution or other harm to its proposed "Ecoparque Turístico Los Farallones de La Pintada" ecopark nearby.

But the Colombian Constitutional Court recently ruled that local governments (including Jerico) can’t by themselves ban mining – although the Court also said that the national government ought to consult with local governments before issuing mining licenses and environmental permits. Colombia’s Congress is supposed to enact a new law defining this consultative scheme.

Meanwhile, two recent Antioquia court rulings have nullified prior Jerico ordinances that would have prohibited mining.

Just as significant, the newly elected Mayor of Jerico -- David Alonso Toro Cadavid – publicly announced that if the national government ultimately approves “Quebradona” licenses, then the local government will do everything it can to ensure an environmentally and socially responsible project.

AngloGold’s upcoming license application to Autoridad Nacional de Licencias Ambientales (ANLA, the national environmental licensing agency) is expected to be filed within weeks, according to the company.

Prior to that filing, AngloGold’s “Quebradona” mining project manager Ingrid Suarez and AngloGold Colombia corporate affairs manager Juan Camilio Quintero unveiled to CGS 2019 a startling, English-language animated film showing how the mine would be built, operated, safely closed and then repurposed into an environmentally friendly, 2,548-hectares-wide biopark – without polluting water, land or air, or causing any disastrous surface subsidence.

Rather than just generating profits for AngloGold, the “Quebradona” project aims to generate “social wealth for Jerico, Antioquia and Colombia,” along with “environmental regeneration,” Quintero stated here.

Bonus: The company will put US$2.5 million/year into “Fundacion ProJerico” for social development schemes.

The project design includes avoidance of noise or air pollution -- partly by employing underground processing of extracted rock -- and putting tailings adjacent to an existing, non-native pine-tree plantation – all of which eventually will be replanted with native species and reconnected to biological corridors that previously have been ruined by local deforestation.

The project entails four years of construction, 24 years of productive mining, 10 years of closure work and construction of the “Biodynamic” park, which will include bird-watching towers, an educational laboratory to promote conservation and native species, solar and wind turbines for zero-emissions electric power, and restoration of tropical dry forest.

The “Quebradona” project is located about three kilometers from the Puente Iglesias bridge over the Cauca river, from which 0.25 cubic meters per second of water will be withdrawn for the mine processing works, according to Suarez.

Sediment ponds from mine extractions and processing will feature effluent treatments to ensure that water returning to the Cauca river will meet stringent environmental limits, according to the company.

Tailings will include filtration systems to ensure that any possible water migration to nearby streams wouldn’t be acidic, she said. Plugging of ventilation shafts will avoid water filtration through the mine post-closing. Other systems will be employed to minimize noise, dust and light pollution during the term of mine operations.

Written by November 27 2019 0

Ireland-based global high-technology consultant Accenture reveals on November 29, 2019, the debut of Colombia’s first tech-demonstration “Nano Lab” -- at Medellin’s “Ruta N” technology incubation center.

“This space will immerse local customers in the latest emerging technologies, including artificial intelligence, extended reality, quantum computing, robotics, cybersecurity, blockchain, among others, to help them understand how these innovations influence their future business operations,” according to Accenture.

“For example, an experience of connected mines shows how augmented reality allows users to visualize a complete mining operation with digital copies of physical assets, such as trucks and drills, running an analysis to provide data on the productivity of individual machines.

“A demonstration of the coffee supply chain shows how blockchain and smart contract technologies can be used to organize and provide transparency to the coffee value chain, recording how the beans change hands, are packaged, repackaged and how they are ground or are served,” the company added.

According to Accenture Colombia president Marco Ribas, “the Nano Lab of Accenture in Medellín offers a new way to bring innovation experiences to our customers in Colombia, allowing them to access the best innovations of Accenture Labs R&D teams worldwide.”

The Accenture global network includes an “ecosystem of allies that includes clients, startups, academic institutions and the public sector, which will join a global network of more than 50 laboratories and Nano Labs of Accenture,” according to the company.

The scheme includes artificial intelligence (AI) “process optimization and influence on strategic decision making” as well as “extended reality (XR) immersive technologies that create completely new ways for people to experience and connect with the world around them,” according to the company.

Other technologies arising in the network include “next-generation cybersecurity services to build resilience from the inside out” as well as "Internet of Things" (IoT) technologies that employ advanced sensors, robotics and machine learning, according to the company.

Written by November 26 2019 0

Medellin-based multinational utilities giant EPM announced November 25 that its 2020 capital and operating budget will hit COP$17 trillion (US$4.9 billion).

“The budget authorized by the EPM board of directors responds to a rigorous planning exercise and includes resources for the attention of the Hidroituango hydroelectric project, which in 2019 has reached important milestones in the protection of communities, care of the environment and technical recovery of this future power plant,” according to EPM.

“The budget also includes items for the expansion and replacement of electric power distribution networks and the development of aqueduct and sewage works in order to increase the coverage of services for citizens [as well as] maintain and/or improve their continuity and quality,” according to the company

The 2020 budget will be financed through three sources: cash-on-hand totaling COP$1.9 trillion/US$548 million (11%), current income from public services including electric power, natural gas, sanitation and drinking water, which in 2020 will total COP$9.8 trillion/US$2.8 billion (58%), and capital resources raised, which for next year will be COP$5.3 trillion/US$1.5 billion (31%).

“The capital resources raised include planned loan disbursements, compensation that is expected to be received from the insurer [Mapfre] for damages caused in the contingency of the Hidroituango hydroelectric project, and dividends that the company will receive from national and international subsidiaries,” according to EPM.

The EPM 2020 budget will be distributed as follows:

• Operating expenses: COP$5.9 trillion/US$1.7 billion (34%).
• Commercial operation expenses: COP$3.9 trillion/US$1.1 billion (23%).
• Investment expenses: COP$4.8 trillion/US$1.4 billlion (28%).
• Debt service: COP$1.8 trillion/US$520 million (11%).
• Cash availability: COP$600 billion/US$173 million) (4%).

EPM also aims to transfer part of its profit surpluses to the municipality of Medellín -- its sole shareholder -- totaling COP$1.3 trillion (US$375 million) during 2020.

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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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