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Thursday, November 12, 2009

Calgary firm seizes golden opportunity in Colombia. But are the political risks too high?

Uribe_2 As a follow-up and counter-point to my recent post “As Chavez prepares for war, is it time to bet against Colombia?” the Western Standard has published a column entitled “Calgary firm seizes golden opportunity in Colombia” by Doug Firby with Troy Media.

The Calgary firm is Antioquia Gold, a gold exploration company operating in Colombia.

I was first introduced to Antioquia Gold by my stock broker when the company was trading at about 10 cents. The company recently reached a high of 65 cents shortly after closing a financing at 25 cents. (I tried unsuccessfully to buy the stock on the open market at 24 cents.)

While the company's management is convinced it has found a viable gold resource, questions remain on the political stability of Colombia, an issue I raised here. On this issue of political risks, Firby writes:

For more than three decades, the country has been held back by international attention to its crime problem. But, that situation began to turn in 2002 with the election of reform President Alvaro Uribe. He vowed to make the country more secure, and rolled out a series of business-friendly reforms aimed at increasing government transparency, investing in social welfare and reducing violence in the country. His initiatives have fostered an economic turnaround, with the economy growing by 7.5% in 2007.

The political risk in Colombia, however, doesn’t come from Uribe. It comes from his despotic neighbour, Hugo Chavez. The Venezuelan President is threatening war with Colombia over its cozy relationship with the US. The US is providing troops in support of Colombia’s war on drugs and the country’s ongoing battle against Marxist insurgents. The fiercely anti-American and anti-capitalist Chavez is insisting the US is preparing to invade Venezuela for its oil riches.

Manuel-uribe So far, investors aren’t being scared away from Colombia or Antioquia Gold, which is only slightly off its highs due to a softening of the price of gold today.

(Pictures: Colombian President Alvaro Uribe, not to be confused with Manuel Uribe, the world's fattest man, weighing 1316 pounds at his peak.)

Posted by Matthew Johnston

Posted by westernstandard on November 12, 2009 | Permalink


AGD actually had a high of 0.66 cents. I think that Manuel Uribe should do the Jenny Craig commercials. I know that I would rather see him on there than that Valerie Bertinelli

muy gordo

Posted by: Chavez | 2009-11-13 6:29:09 AM

Chavez- That fetish of yours takes the cake. You prefer that guy, to Valerie Bertinelli? Oh well, to each his own.

Investing in hyped up gold ventures is about as smart as answering an email from the niece of the late minister of finance of Nigeria.

Posted by: dp | 2009-11-13 8:07:58 AM

"Investing in hyped up gold ventures is about as smart as answering an email from the niece of the late minister of finance of Nigeria."

I would say that's a fair assessment. With most junior exploration firms, you're paying for stuff that might or might not come out of the ground in several years (assuming the stuff is there in the first place). The only reason these things are trading at the valuations they are is because the central banks are inflating.

Posted by: Charles | 2009-11-13 8:51:29 AM

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