LATIN AMERICA SPECIAL — Greenstone enlarging Colombia mine

The only Canadian company operating a mine in Colombia is Greenstone Resources (TSE).

In a sense, the Toronto-based company was able to benefit from the negative news flowing from the South American country. It was a situation that permitted Greenstone to take its time picking over the best mining prospects. There has been little competition and no need for urgency.

The company chose the partly developed but inactive Oronorte gold mine 95 miles north-northeast of Medellin. It was small enough to be within the realm of junior mine financing and rich enough to hold out the promise of a rapid return on capital.

It is an underground operation which moved into production in November, 1990. A 100-ton-per-day (tpd) mill produces a high-grade flotation concentrate for shipment to Japan.

Gold production in 1992 was 13,500 oz., short of the 15,000 oz. target because of power and labor problems. These problems have since been resolved. Production for 1993 is planned at 14,000 oz.

Additional working places are to be brought on line and mill capacity increased to 250 tpd in 1994 with a consequent increase in production to a planned 20,000 oz. Cost of the expansion is estimated at US$1 million and will be financed out of cash flow.

Greenstone also plans to cyanide on site and produce bullion rather than ship concentrates. Mill heads are 0.5 oz. gold per ton. Proven and probable reserves are 224,000 tons at the same grade.