Colt Resources has already invested €60 million in its plan to begin gold and tungsten mining at two sites in Portugal which once under construction will deliver hundreds of jobs for local people, thus helping to boost the country’s economic recovery.
The exploration expert expects to spend another €100-130 million to get both projects off the ground which will ultimately require 150 permanent staff when production is underway.
Once the flagship exploration projects at Boa Fé and Tabuaço are in production, the incoming cash flow will allow Colt to upscale activity at other Portuguese gold and tungsten sites, as well as abroad.
Business Development Manager Luis Martins said: “I want to have both of our mines producing so we can then generate cash flow and invest in our other projects. We want to spread our activities through Europe and the Middle East, and other locations all over the world.”
This includes a venture in Pakistan currently being explored by Colt Middle East, where copper mining could also bring in money to boost funds for the projects in Portugal.
Founded in Canada in 2007, Colt quickly moved to the Iberian nation on receipt of data from previous operators and the Portuguese government, with whom it shares a highly constructive relationship and vision to turn around economic fortunes.
Boa Fé and Tabuaço
The open-pit gold resources at Boa Fé, 95 kilometres east of Lisbon, and underground tungsten supplies at Tabuaço, in the north, represent the springboard for Colt Resources to emerge as a key mining player both in Portugal and elsewhere.
Boa Fé hosts several gold deposits such as Banhos, Casas Novas, Chaminé, Ligeiro and Braços, and according to preliminary economic assessments contains reported indicated resources of 340,310oz and inferred resources of 84,200oz of gold. It has an estimated 11 kilometres of gold mineralisation.
Initial metallurgical test work has demonstrated that the gold at Boa Fé is readily recoverable using a combination of conventional methods such as gravity, flotation and cyanide technologies, with Colt looking to start production by the end of 2015.
The Tabuaço Experimental Mining Licence (EML) in North-Eastern Portugal covers a total area of 45.13 square kilometres. Since 2007 Colt has carried out extensive outcrop sampling work, and then embarked on an exploration and evaluation diamond drilling program which to date involved in excess of 100 drill holes, totalling more than 11,400 metres.
Martins outlined the importance of impending bankable feasibility studies to the progress of both projects. “We are looking to conclude this by early next year,” he said.
“We are developing a resource estimation update and are pretty sure there is huge potential, the bank feasibility study will prove this and encourage investment. The strategy is to start production as soon as possible and generate some cash flow.”
“We are open to many avenues of construction and production and for example have had conversations with potential German and Chinese partners about mining at Tabuaço.”
Investing in Portugal
Several factors combine to explain Colt’s decision to develop the gold and tungsten mining sectors in Portugal.
The country has a mining legacy stretching 2,000 years back to Roman times and Martins points to a continuing enthusiasm and acknowledgement of the industry’s importance to the nation’s economic recovery.
“In 2012 the government published a new strategy about mineral resources that gives clear political support to the mining sector,” he said. “We have a great relationship with them, and also have a beautiful infrastructure, a very good motorway network and our properties are nearby along with ports and prime rail connections.”
Colt has also been able to draw vital investment from a number of Portuguese sources, part of a batch of investors including a Canadian pension fund and several institutions and individuals from Germany, Switzerland, China and Hong Kong.
Construction company Teixeira Duarte is a key partner. “They are a big construction group working not only here but in Brazil and Angola,” Martins added.
“They have a mining division which is developing several works for Portugal’s main copper mine Neves-Corvo and can help us to develop our projects. All our investors share our view and strategy and feel that they will see a good reward on their investment.”
So far investment into the two projects has exceeded €60 million with Martins predicting another €100-130 million be needed before both sites become operational, making the banking feasibility studies of utmost importance in order to secure the remaining funds and deliver new jobs for locals.
Colt’s current 25 staff and 50 sub-contracted exploration workers benefit from the years of expertise in the company through internal training. It also has fruitful relations with several Portuguese universities such as the University if Lisbon and University of Évora and Aveiro located near Boa Fé and Tabuaço.
“This is about building local partnerships in an academic and vocational point of view as well,” Martins said. “We are already conceptualising the hiring of more people for the construction and production with our subcontractors.”
Into the Middle East
Away from Boa Fé and Tabuaço Colt has several other promising exploration works progressing both in Portugal and in Pakistan.
In Portugal, the company is exploring for gold at Santo António, Montemor, Cercal and Cedovim, while finding reserves of gold and copper in a joint venture with junior British company Star Mining at Borba in the east.
It has also established Colt Middle East, for which it owns a majority share of 38 percent. This is a unit dedicated to exploring copper potential in Pakistan near the world-renowned supply at Reko Diq, one of the biggest porphyry copper deposits in the world.
Colt Middle East has entered an agreement with Australian-based company Lake Resources, and is working closely with local communities and the government of Balochistan to develop what it hopes will become a world class asset in the Chagai Hills copper and gold district.
Martins said: “If successful this could completely change the dimension of the company and could provide important funding for our projects in Portugal.
“There are political and social issues but still we are working with the local communities to obtain the social license and I think the people will take care of us and we will return a safe and secure investment.”
With promising signs to be seen both in Portugal and in Pakistan, Martins believes the company can look further afield in the future. “We can bring benefits to our shareholders and the people in the areas we look to operate in,” he concluded.
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