Colombian Mining Roadshow 2021 - 24 de noviembre

Hey! This is Colombia, a fascinating country for its landscapes, its people, and its natural riches. A country that works day in and day out to overcome the challenges it faces as a society and thus consolidate the path to growth and development. With its strategic location, with coastlines in two oceans, a growing infrastructure, and sound democratic institutions, Colombia presents itself to the world today as a country full of investment and business opportunities.

Deep inside Colombia's eastern mountain range, men and women with ancestral knowledge of the mountains work hard to find something unique: Colombian emeralds. Colombia is the largest producer of emeralds in the world, appreciated and recognized for their color, quality, and beauty.

Colombia is the world's fifth largest coal exporter. On the north coast, near the Caribbean Sea, there are some of the world's largest coal mining projects. There, expert Colombians in the management of colossal technologies extract this important energy source.

In the department of Córdoba, in one of the largest ferronickel operations in the world, hundreds of tons of nickel have been processed over the past 35 years, a mineral used in an alloy of a myriad of everyday products.

The mountains of the Colombian Andes also house large amounts of mineral that has been a store of value over time: gold. Today, companies from several countries produce gold using different technologies, contributing to the development of regions and their inhabitants. The country also houses a significant wealth of minerals such as coal and salt, which are processed for the local market. A salt cathedral was built inside a tunnel of one of these mines, which is now an international tourist attraction.

Acknowledged as a remarkable mine closure, the mining sector currently contributes two percent of the gross domestic product, generating 152,000 direct jobs and well-being for thousands of families in different regions in the country.

But this is just the beginning. The mineral potential of this country is yet to be discovered. Geological studies have shown the existence of deposits yet to be developed. That is why the National Mining Agency, following relevant studies and consultations with the communities, as well as environmental and local authorities, designates strategic mining areas where the development of mining projects has the possibility of benefiting everyone. The management of mining companies is thereby facilitated, since prior studies of the geological potential of the area are available, along with the necessary conditions regarding social and environmental standards, making the development of projects possible.

For this purpose, the National Mining Agency advances strategies in the regions close to the communities to foster social licensing, which goes hand in hand with the development of one of the pillars of the mining authority: the demystification of the activity. This is the case in certain areas of the Perijá Mountains, where copper deposit potential has been found.

Colombia is searching for companies that share its vision of mining to consolidate a responsible, inclusive, and safe industry that embraces the best national and international practices. A country being built by its sustainable mining operations, forging a better future.

National Mining Agency. Greetings to all attending the second day of the Colombian Mining Roadshow. I'm Juan Camilo from the National Mining Agency Promotion Group. Today, we continue this important event hosted by the Colombian National Mining Agency, the Colombian Embassy to the United Kingdom, the British and Colombian Chamber of Commerce, and the Department for International Trade in the United Kingdom. Before starting, I remind you that the transmission has the option of simultaneous translation. Therefore, the attendees will be able to choose the language of their preference between Spanish or English at the lower bar of the screen on this transmission.

Ladies and gentlemen, we start today's agenda with the opening remarks from Mr. Simon Adamsdale, Chairman of the British and Colombian Chamber. Mr. Adamsdale, receive our warm welcome.

Thank you, Juan Camilo. A warm welcome to this, the second day of the first Colombian Mining Roadshow. And we have over 200 delegates from across the sector, including investors from London and elsewhere, mining representatives of the projects and mining companies, members of government, and also all the people involved in the supply chain to the mining industry, which is a large one, including engineers, consultancies, and such like. This is the inaugural Colombian Mining Roadshow, and it's organized, as you've been told, by the Colombian Mining Agency, A.N.M., the Colombian Embassy in London, and also the Department of International Trade in Colombia in Bogotá, and finally, by the British and Colombian Chamber of Commerce based in London. We have focused yesterday on a balanced view of the opportunities in Colombia, and today we'll focus on the measures needed to take advantage of these opportunities and to manage the challenges ahead. The emphasis is all throughout on responsible business, and this was alluded to continuously by the distinguished panelists yesterday in terms of social impact, environmental protection, local communities, and sustainability. And in this context, if you don't get the local communities on side, you don't have a project. In the Colombian Chamber of Commerce in London, we run an annual competition in which we award prizes for responsible business, and this takes place next year on April 21st, and anybody is welcome to join from Colombia or the UK next year. As this conference develops momentum, we hope to provide opportunities for sponsorship, and anybody who's interested in this aspect, please contact the British Colombian Chamber of Commerce. I would not now like to hand over to the President of the Colombian Mining Agency, Juan Miguel Durán. One minute ago, over to you, please.

Thank you, Simon. Okay, well, good morning and good afternoon to everyone. I'd like to thank you all for joining us today. Special greetings to His Excellency, Mr. Antonio José Ardila, our Colombian Ambassador to the United Kingdom, and of course, to Mr. Simon Adamsdale, Chairman of the British and Colombian Chamber of Commerce, to all the panelists who will join us today, and to all who were connected to this important event. The Colombian government has been working on transforming mining into opportunities, focusing on the development of a responsible, modern, and efficient mining activity. Colombia has an important economic and social development, especially regarding the mining sector. Mining has been an important driver of our economy, and it is projected as a strategic post-pandemic productive reactivation policy. As mentioned yesterday, we are focused on diversifying our mineral matrix, thanks to the potential of our territory and the policies created in order to facilitate mining investment in our country. Today, we will be focusing on our mining rounds, a mechanism created toward the strategic mining areas, which are areas with high potential for strategic minerals declared by the Colombian government in order to boost mining exploration in our country. These have become essential elements in our diversification strategy and are now an essential tool used to promote domestic and foreign investments. Areas are awarded under special exploration and exploitation contracts through an objective selection process with competitive contractual conditions that aim to boost mining exploration and exploitation. It's important to mention that the strategic mining areas have consolidated scenarios at the social and environmental level. They have fulfilled a previous process of coordination and concurrence with local authorities and prior consultations with communities, as well as an analysis of environmental information to facilitate licensing procedures. All of these advantages provide clear basic rules and efficient timelines that generate legal certainty for investors. In addition, the investor will have access to information pertaining to these areas, as well as specialized inputs that will surely make an attractive scenario for capital investments. Now, Catalina, our promotion manager, will present you detailed information about our mining rounds. Thank you all, and Catalina, the floor is all yours.

Thank you, President Juan Miguel. Good morning, good afternoon in the United Kingdom and Europe, and good morning in Colombia. As President Durán mentioned, I will focus my presentation on the mining rounds. However, before I start, I would like to take up some data from yesterday's presentation just to highlight the importance of the mining sector for Colombia and the opportunities that our country has to offer to companies and investors. So, just to add, we have investment grade, which goes to show the confidence of investors in our economy. We have 16 trade agreements, 14 investment agreements, 12 double taxation agreements, and an exceptional geographic location, which is an opportunity to export to exploit our export potential towards international markets. According to the most recent annual survey by the Fraser Institute, Colombia ranked first in the investment attractiveness index and best practices mineral potential index in Latin America.

Just to recall some numbers concerning the mining sector and its importance to our economic activity in Colombia: our mining sector represents approximately 1.38 percent of Colombia's GDP. It represents 25 percent of total exports by 2020 and it creates around 167,670 direct jobs in 2020 and more than half a million indirect jobs. In terms of exports, mining exports reached 7.7 billion dollars, or the equivalent, as I mentioned, to 25 percent of total Colombian exports. Coal accounts for 54 percent of Colombian mining exports, followed by gold and precious metals with 37 percent, and ferronickel with six percent, and emeralds with one percent, which are the most representative minerals. This is why one of our pillars is based on the diversification of our mineral matrix, which is one of the reasons we bring today the mining rounds.

So, going into the specifics of what are the mining rounds, as we have called them, this is a tool to achieve mineral diversification, as I mentioned, and as our president mentioned, to boost exploration in the country. It's a flexible, competitive, and transparent process with clearly established timelines for access to mineral and mining areas. So, the genesis of these mining rounds comes from a faculty given by law to the National Agency to be able to reserve mining areas and to award them through a competitive process, which is the process we will be showing today.

Some of the incentives or the benefits of these strategic mining areas come from the selection process, which assures a transparent, flexible, competitive process to the awarding of the strategic mining areas. Also, these areas produce additional resources for the country and its territories, which become a benefit and an incentive for the development of mining activity in Colombia. As President Durán mentioned, these areas, on the other hand, have a well-established and consolidated scenario at the social and environmental level. Before, and I will show this in the next slide with more detail, but before we can establish a strategic mining area, we have to follow up a process with local authorities and prior consultation with communities, as well as different environmental authorities in Colombia. This facilitates the licensing process for the companies, especially because in terms of environmental assessment, we have come to an agreement with the Environmental Licensing Agency that for these specific areas, we give to the investors or to the companies a baseline analysis produced by the Environmental Licensing Agency. So, it has become, or it can become, the baseline for the environmental assessment evaluation later on for the licensing procedure. Also, in terms of the strategic mining areas, this is an instrument to promote domestic and foreign investment, promote competitive contractual conditions to the companies, and contribute, as we have mentioned a couple of times already, to the mineral diversification of Colombia.

So, how do we reach a strategic mining area? So, this is a process that takes more or less a year to a year and a half for the mining agency because it starts with a deepening of the geological knowledge that is done by the Geological Survey of Colombia. With this information, when we identify where there is high potential for any of the strategic minerals that the Colombian government has defined, such as copper, gold, also we have coltan, we have nickel, we have iron, we have a couple of strategic minerals, most of them defined by their importance for the energy transition process. When we identify that there is high potential for any of these minerals, we come to analyze the area and reserve the areas with high potential. This is done by the National Agency. Done this, we start a three-process, a three-step process that goes in parallel. First is the what we have called characterization of the territory. What we have done or what we do in this stage is that we do cross-check with most, or at least the most amount of variables we can, in terms of economic variables such as economic vocation of the territory, agricultural priorities or projects. Also, in terms of infrastructure, what we have in roads, not only what we have at the moment but also in terms of planning of energy infrastructure, water and sanitation infrastructure at the regional and local and national level. We also do this cross-check information with the environmental agencies at the local, regional, and national level so we can be all informed of what are the plans in terms of the areas, but also this helps us identify beforehand future possible conflicts that we can mitigate with this information and this process beforehand. Given this stage, or any parallel, we do the coordination and concurrence with the local authorities. That way, we can also establish a direct dialogue with the local and regional authorities so they can know the plans and also give us enough information so we can beforehand prepare the areas and, if there is the case, we can take the decisions before defining the strategic mining area. Finally, we work with the Interior Ministry and the Direction of Prior Consultation at the national level so we can identify if there are ethnic communities that are around the area of interest. If it's the case, as the National Agency, we develop the prior consultation, and if there is no identification of ethnic communities, this is certified by the ministry. With all this information, and as I mentioned, this is one of the most important parts of the process, is that we prepare the areas at the local, regional, and national levels. We try our best to identify possible conflicts in terms of other economic or projects that can occur in the territory, and we do all what's necessary to mitigate these risks so that then we present to you and companies and investors the areas that are that reach all the criteria, starting with the high potential of the minerals we are interested in, to the selection process.

So, how can anyone participate in an offer for the strategic mining area? So, we have defined five criteria basically: legal capacity, technical capacity, financial capacity, capacity in terms of environmental assessments or environmental capacity, or also corporate social responsibility. This process we have established through an area system is a free process and has the advantage that anyone can do it at any time. It has to be done only once in a lifetime, so that if from there on, after the habilitation process is done, the company can take the decision to offer for one of the areas, or they can simply stay habilitated in case that in the future we present an area that is of their interest. Also, one of the things to remark about the habilitation process is that it has to be done only once for all the rounds we have to offer. So, for instance, a company that was that beat their process for the habilitation for the copper route, they won't have to do it again for the gold route that we will launch later on this year or starting next year, or also to the phosphates route. This is a process that it's done only once for all the routes, and also that it's only done once in the lifetime of Colombia. The only thing is that each year, only two or three basic documents have to be actualized or informed to the agency, but in order to keep the habilitation active, but the rest of the information was done only once and it doesn't have to be repeated again. So, with this, the idea is that then the offer process for the selection process is very strict in terms of terms, and that way the companies can be assured of the times where, as soon as they place an offer, in more or less how much time they will have the contract in case that I get awarded.

So, what this is the selection process where we know this is new in terms of the mining sector. It's not very common to find a selection process, a competitive selection process, to achieve or to get to arrive to a mining contract. So that's why we have designed a process trying to be the more flexible for the companies, but also obviously transparent, but also very agile in terms of the process, so that the companies and the investors have guarantees in terms of when they start, when will this process finish, and which are the conditions. So, here to remark that we usually when we place out that when we offer the areas, there is no timeline to be on the first offer. The areas are available for any time any interested party to access the data room, to get to know the geological and environmental information we have placed for them for each of the areas, and as soon as they are interested, they will place the first offer. That time starts to count as soon as this first offer is placed. So, as soon as it is placed, the National Agency has five days to evaluate the offer, and after that, we have 15 days to make public the offer with the basic conditions, and there are 15 days so other counterparties can place other offers to this area. If no other counter-offer is placed, then the area, five days later, is awarded to the first offer. In case a counter-offer comes, the first offer has that opportunity to better their first initial offer, and that's more or less it. And for this process, we were also inspired in the PPP processes that, well, the UK and Colombia, well, the UK especially is an expert in this. So, this is basically an incentive for the first offer, but also the opportunity for other parties to know what are the conditions that have been offered to an area, and that we have a competitive and transparent process for each and every one of the areas that we have to offer. After this period that can take the least a month, the most three months, then the contract for that area is awarded, and the companies have at most three months to sign the contract.

And well, just to summarize some of the benefits this brings, apart from what we explained of preparing in each of the areas, giving more information to each of the companies about each of the areas in terms of geological potential, in terms of social processes, in terms of environmental characteristics and processes, also about economic activities, infrastructure, and other industries around it. For instance, this is a benefit also, as we mentioned, the analysis that is given by the National Licensing Agency is the baseline for the environmental impact assessment, which is something that it's not given to any other type of project here in Colombia. Also, the competitive conditions, contractual conditions, we have well, we can give more information in any specific bilateral meeting, but we have designed a contract that has collected some experiences from other countries, trying to bring contractual conditions that are more competitive in terms of our other countries and our mining sector. And in terms of the selection process, we've brought up a process that has fair rules and timelines very specific to generate legal certainty for investors.

Just to show you, we have started the first copper route in March with five initial areas. At the moment, we are preparing more areas to bring up to this route. That number four area on the top was already awarded in October to our first contract. I believe yesterday Mr. Romero Gómez was in the well, gave some presentation about it and talking about what this process meant to them.

And we have brought this slide just to show you what we have achieved in terms of exploitation of areas, just in exploration, what we have today, but just how promising Colombia is in terms of its potential for copper. So, we still have a lot of process to go and territorial areas to offer, and we will be producing more information and also preparing more areas to sum up to this copper route.

And also here to show, we have launched the phosphate route, which is a strategic mineral, specifically in terms of agricultural production. We have started to launch this route on November of this year with four areas, based basically on Boyacá and Huila, and here our potential in terms of phosphates, also our production is very low at the moment, and we have identified around 3 million hectares in terms of promising areas. And just to close up, what is next in terms of strategic mining areas? We have, we are preparing a gold route to launch starting next year, and also a route that is focused basically for formalizing miners, so for small miners here in Colombia. So, this is a process that, as it is attractive to big investors, but also we have been designing and adapting this figure for a small miner, so this can be an inclusive instrument for the Colombian mining sector. And to finalize, we want to show you what we have been working on, and we, President Durán, presented on Export Y, that we were last at the beginning of this month, is that for these strategic mining areas, we will bring new technologies such as blockchain in order to create our first smart contracts in the mining sector. This brings us an additional benefit: the security and transparency of the contracts, and on the other hand, the possibility to create tokens and to open the market and the financial opportunities apart from the traditional mechanisms in terms of the financial markets, to this new area of crowdfunding capital and other innovative financial strategies that go through digital assets. So, we are working at the moment to bring these new routes with this mechanism, so that not only the investors will have information and guarantees and clarity in terms of the areas, also in terms of the incentive of different contractual terms, also the clarity of the selection process, but finally the innovation and new opportunities that bring the new technologies that we have at hand. So, this is our presentation. Thank you very much.

Thank you, Ms. Catalina, for your presentation. Also to President Durán and Mr. Adamsdale. We will continue with the panel, but before I would like to make two brief announcements. The first is to remind investors that the one-to-one meetings can be requested by sending an email to corporate@britishandcolombianchamber.com, indicating the company or companies you are interested in meeting with. And also, in the chat, you can find a link that will lead to the satisfaction survey for you to please fill out at any time.

So, at this moment, I would like to bring forward the panel "Operating in Colombia: Case Studies." We greet moderator Oliver Walk. He's the General Manager for Colombia and the Andean Region for Control Risks. Mr. Walk, the floor is yours.

Juan Camilo, thank you very much. And thank you, of course, to the National Mining Agency and to the British Colombian Chamber of Commerce for hosting us, for having us for this event. If I could quickly get all of the participants on the panel, Jaime, Phil, and Christopher, to turn on your cameras. There's Christopher. Good afternoon to you. Good morning, everyone, based in Colombia. So, the idea of this panel really is to explore a bit further. We obviously heard from the A.N.M. just now some of the upsides and the strategic plans, and that is of course interesting. But we thought we would have a conversation with people who have perhaps gone a step further already, who went ahead and looked at and then started getting invested in operating in mining across Colombia in different sectors. So, we have a very distinguished panel with us today. Perhaps, gentlemen, just in the interest of time, because we really only do have a couple of minutes, I'll leave a quick intro to each of you to introduce yourselves rather than I run through the entire bios here. And maybe I'll combine that, if you want to quickly sort of combine your introduction to yourselves with an opening thought on, I guess, building on the comments we heard just now, some of the upside that you see in Colombia. What is the reason, maybe focus on one, that made you want to get into mining in Colombia, if you could share that with the audience? Chris, do you want to kick it off?

Sure, absolutely. Well, I'm Chris Harris, I'm CEO of Hex Resources, and we are in emeralds exploration and mining in Colombia and Brazil. We're UK-based. Now, look, why? My background is generally mining and finance. I spent quite a bit of time in this community. Why Colombia? I have really been mining and doing commercial business in mining around the world, and I think there are some very strong drivers here which brought me to Colombia, which I would invite you to look as well. Basically, there's a significantly unexplored area here, and I think Jaime will talk a little bit more on this up in the gold area. This really is a largely unexplored area. In emeralds, which I'm in, you know, there haven't been new discoveries for a long, long time. You know, some of the assets there are 400, 450 years of mining. You know, it's time for a new discovery. Secondly, it's the general rule of law. There's very strong rule of law here. It's impressive, and in fact, the operation of the A.N.M. within that is very significantly good as well. I love the way that there's good rulings around treatment of minors, temperature controls, etc. You know, the sort of things that you'd look for in a very top-level mining area, that is what Colombia has here, so that encourages me. And then finally, for emeralds, Colombia produces the best emeralds globally and has gained for centuries. And so, you know, why I'm here is to try and produce more of the same and trade them. Thank you.

Phenomenal. Thanks, Chris, for that intro. Actually, do you want to continue to pick up where Chris left off? Tell us about yourself and why mining in Colombia.

Thank you, Oliver. I will speak specifically for gold. We are, I will speak for the Otu-Otu fault. The Otu-Otu fault is located in the northeast part of Antioquia, of the department of Antioquia. It's a generational district. The this area, this fault has produced 17 million ounces historically, and this is true in formal mining to our artisanal miners that only scratch the surface of the resources. So, we were very excited. I think as far as the Otu-Otu fault is concerned, there is a, this is a generational district where for generations people have made a living from mining. So, people are very familiar, and the upside potential is huge. I mean, there's very little systematic exploration of the assets, and you know, we have been happily surprised by the amount of veins and resources that we haven't uncovered through geophysics and has been confirmed by the drilling activities and the drilling process. We're very excited. I think Antioquia, and specifically the area where we are in the northeast, is a particularly very prospective area, which we all know that for security reasons was out of bounds for exploration, you know, in the past century. So, we're really benefiting from this systematic approach that we're using, us and other companies in the district. Thank you, Oliver.

Thank you very much, Jaime. Appreciate that. And Phil, maybe the same question over to you. Evidently, you had a slightly different part of the supply chain here, but you do produce, I believe, in Bogotá as well. You source material from here. You could probably source that from elsewhere, but why Colombia in your case, if you want to quickly introduce yourself?

Yes, so, good morning. Phil Spencer, London Do You Find Jewellery. We're, as you say, based in London, in Hatton Garden, but we have an office in Bogotá, in the downtown area, where we source emeralds and produce emerald jewelry for worldwide distribution. So, for us, we specialize in college, so for us, Colombian emeralds are obviously a mainstay of our production. So, yeah, that's the main reason for operating in Colombia. Also, the competitive advantages from the fact that costs are much lower there as well, approximately a fifth of what they are in the UK, was also a key advantage to us. And so, what we're trying to do is basically build a niche within our market as an ethically sourced gemstone specialist. Flying Jordan. So, as well as Bogotá and London, we're also about to open an office in the DMCC in Dubai, one of the fastest-growing luxury markets in the Middle East. And we're looking to expand business out into Asia Pacific as well. So, yeah, those are the sort of key drivers for us. So, we've been operating now in Colombia for the last 12 months, and we found that the main area of difficulty has been actually with banking and some of the export licenses, some of the bureaucracy. But in terms of actually operating there, recruiting people locally, setting up offices, buying materials, and so forth, that's been very straightforward. And as I said, the cost, I think that's been a real positive for us.

Thank you very much, Phil. Thank you, Christopher, for that. And Phil, maybe I might just stick with you for kicking off the next part of the conversation. So, what we agreed in this panel is we most certainly want to talk about the upside opportunities. We also don't want to pretend as if there is no potential downsides here and there aren't risks that need to be managed in order to be successful. And evidently, that is the core of what we do at Control Risks as well. So, as we're preparing for this, we spoke about a number of key risks and regulatory issues. You just spoke about some of the bureaucracy, approval processes, licenses, etc., are certainly something that investors everywhere have on their radar, but also in Colombia. And having, I guess, good experience and bad, I'm interested to hear from each of you specifically on this issue of regulatory and approvals and bureaucracy, best practices, lessons learned, anything you can share with potential investors and operators. So, why don't you take it off with you since you mentioned it, and then we'll go in inverse order if that works for you as well?

Yeah, sure. So, the workaround that we've established is working with suppliers who have the CI and the export license in place to add to the workflow for us. Obviously, that incurs further cost. We are in the process of applying for our own licenses. And another sort of issue we had was in terms of establishing banking infrastructure. So, I think particularly in our industry, being in the jewelry industry, there's a very high instance of money laundering in that sector. So, there's a particular sort of pain point when it comes to establishing bank accounts and getting the compliance in place to do that. So, that's an area that we found we've managed to get around it, but obviously, it's taken quite some time, and it's a lot of effort to do that. And obviously, that's coupled with the fact that there are very few international banks operating in Colombia, so we don't have quite as much choice. But to say, we have found workaround solutions for that, and we do now have that infrastructure in place.

Thanks, Phil. Now, we're going to inverse order. So, Jaime, any lessons learned from Otu-Otu Gold on the regulatory approval side?

From our end, I will say that, you know, we're happily surprised with improvements in the regulatory process. It's more agile. I mean, there is, you have access to the local authorities, to the environmental authority. So, for us, I mean, picking up on what Phil said, I think the issue of the banking challenges is an issue, I think, for everyone in the industry. And I do understand the position of the banks coming in from, you know, from the angle of money laundering in Colombia and in the industry. But for us, for the exploration companies, obviously, there wouldn't have been a disadvantage because there's little that we can do to prove that there is no risk to the banks. But obviously, that's one of the issues. On the positive side, I have to say that the regulatory process has streamlined. The platforms used by ANM, for instance, are very agile at this point, and that we have a very good experience with the reaction of the authorities to our requests, or you know, we have very, I think the issues are being addressed. So, you know, we're happy to report that, you know, things have improved from where we were 10 years ago.

Thank you. Chris, is that something you would put your name to that statement?

Sure. Look, I mean, so for me, it's like echoing Jaime in that I actually think my experience with the ANM and the operating of the mining documentation process, etc., was quite impressive. For me, the difficulty has been, I had thought it was just an emerald thing, it was the bank accounts. And you know, there are issues effectively in terms of really, until you're a listed company, there will be this greatest scrutiny on you. Now, I know this is something that we're all working together with the BCCC, and hopefully, the ANM will be able to help. You know, the main thing here is new companies like Hex are trying to bring transparency to the trade, and we need to be helped in that process. You know, we know we are the change, and we are going to bring that forward. So, you know, I would say that as somebody coming in and looking to come in from an advanced, you need to really do your homework in terms of this. You need to get good advisors, etc., but don't underestimate the issues on things that you might normally not have had a problem with, i.e., opening bank accounts. So, for me, residually, it's just the bank account issue is the thing that needs still needs improving.

Thank you. Thank you, Chris, for that. And certainly, one of our friends at the ANM to take note, I hope, because that was a parallel theme in all your interventions. So, maybe I might extend this to you on a slightly separate level. So, there's evidently the formal bureaucracy, approvals, licensing, your environmental license, and we heard about some of the improvements in that process just now. And then there is evidently, as every miner knows, the more informal side to it. And in particular, I'm thinking about the what's called the social license to operate, right? So, not actually formal approval unless you have a consultability in Colombia, but you do have obviously the requirement to engage with your communities. And we have seen mining projects come up short on that front for different reasons, ultimately running into problems on this issue of the social license to operate. And we saw a few years ago, there was a whole movement across Colombia on ultimately completely illegal and non-binding plebiscites, but nonetheless, community efforts to hold votes to show companies that they didn't want them there. Maybe interested to hear your thoughts on everything to do with social license to operate, any lessons learned, anything you want to share with other potential investors thinking about Colombia on that front?

Sure. Okay. Is that me? Okay. Yes, look, we've spent, my style here, and what I would recommend is that one spends a lot of time on this. It's absolutely critical. Just from my mining background and just generally as a person, one has to gain the access and the trust of the people locally to be able to operate there. It's something that you need to take time on. So building, so you need to build relationships with your stakeholders, with your peers, and with the community. And within that, and we'll talk about the illegal mining setup later on, the community has a long historic role in all of this which needs to be respected, and there needs to be dialogue around that, and we can talk about that later. But for me, what was very important is we've spent four years building a relationship in the areas of Muzo, of course, and indeed with the people in Bogotá. And it's absolutely critical. You need to know, really, in any new domain you go to, but especially in Colombia, you need to know who you're dealing with, who your peers are, who you're going to work with, and that would be the key thing I would pass on to people watching this in the conference.

Thank you, Chris. And maybe one point to add to that. So, from our perspective, since we sometimes support on this, I guess it's absolutely critical as you say, take the time. And you'd be surprised how often people personally don't take the time. And secondly, end up speaking to the wrong people. So, you end up establishing relationships with the wrong sort of informal power structures that you didn't appropriately map, that you didn't understand, you didn't know you were getting yourself into. So, taking time, I think, is absolutely crucial, and then also making sure you're diligent about engaging the right people. I mean, where you want to jump in on this question as well?

Uh, thank you, Oliver. And you know, from our end, the issue with the community is essential to the success of any company. And one of the issues that in Colombia has been a point of contention in the past is the ownership of the rights, the rights to the underground. And I think particularly from my experience, and Chris knows about the emerald business, you know, one of the issues that is paramount in Colombia is the rights of the underground. We believe that the communities have a right, and the landowner has a right over these resources that are not only in their territory but are in their own farms, in their own lots of land. So, for us, we try, we always try to find formulas to recognize that right to the communities, and that has been a keystone for our success in, you know, in this. You know, obviously, we just arrived to the Otu-Otu fault, but, you know, anytime there is an issue with the community regarding water or, you know, issues of, you know, when you build the platforms and all that, so we always ask the question that we ask is, what is the size of the company that we dream of? Is it 100 million, 200 million? And what is the issue at stake? How much does it cost? One million pesos, two million pesos? So, for us, when you look at the perspective of what these communities want from you, as much as, you know, as far as roads usage, as far as access to the platforms and going through their farms, under their land, I think, you know, the issues are pretty clear that the communities have a right on that. And from our point of view, you know, in those countries where the underground resources belong to the owner of the land is where you have less community conflicts and less community issues. Although we do recognize that that's not the constitutional right in Colombia, we always have that as a point of reference to find formulas to accumulate and adjust to what people in the communities are saying.

Thank you, Oliver. Chris knows that in the emerald business, you know, the landowner always has a right on the operation. Absolutely. There is a formula, and the businesses are sized, the businesses are good enough for people to share that participation. Like Chris knows that there is a four million boy academy that works very well.

Yeah, absolutely. And there is, you know, there is a percentage of emerald production that is paid back into the community, which is a great mechanism, which is not seen in all mining countries that I've been in. Look, I mean, we could segue from this very easily into the sort of linked thing of illegal mining, community mining, because though, if you don't mind, Oliver, because we're short on time, that is the next question. So, because effectively, you know, look, you have to separate the two. And community mining, there is this historical right and this thing of being at one with your community and giving back. And so, really, very much my view, and I think the view of Jaime will be, is that it's about getting all the stakeholders around the table and discussing this openly and coming to a solution which is right for everyone's perspective. And I believe absolutely, behind me, this whole thing that, you know, there are different levels of support that when we were doing, and a lot of these things that I wanted are actually quite achievable. And for very, that's very important to us. It's not only that we can, but the important thing is to bring in and to formalize this informal mining that is happening. I think if you provide the right mechanisms, and I was hearing the A.N.M. talking about that earlier, then you do that in an automatic way, and I think that is the best way to drive the parties together, really, I do. So, that really would make my comment on the illegal mining, community mining side. It's a complex area, but with a proactive A.N.M. and with all the parties at the table, it can be resolved.

Would you what would you say? I mean, no, I, you know, I fully agree with you. I think what makes illegal mining, these are the laws, but these people are operating in their own territory. Mining has been a source of their income for generations. So, essentially, you know, the fact that they didn't go to the mining agency and apply for a title or for a minimum right, that doesn't make them illegal. So, that's it. And then you force the companies like us to be facing a situation that we don't want, that we didn't create. And suddenly, you go to a territory and everyone is an illegal miner, when they have been doing this for generations. It's just that the law was not shared, people were not aware of their rights, you know, and it's just a timing issue. So, we, you know, we think we need, we always trying to find formulas to recognize the rights of the communities and the rights of the landowners to the underground resources. Yeah, that's the way to keep peace. Absolutely. And it is just, just jumping in on that specific point, because there are evidently, to your point, you know, communities that since the times of Maria Centeno in the 16th century have been mining across Colombia. And there are areas where you talk less about community mining or artisanal mining, but more actual criminal mining, right? People coming in, illegal actors, nefariously participating in.

This activity, but actually, while that is a significant security concern, what we found is that bringing the formal sort of the artisanal miners from the community, that are legitimate in the community, onto your side and making sure that you engage with those people is your number one best strategy against the more nefarious actors as well. So we've seen that time and again at different projects across the country. What you're mentioning there, Chris, what you mentioned about making sure you have those folks close, they have, you know, ancestral rights to what they're doing, but there's also mutual interest there and having that close relationship. Absolutely, absolutely.

Yeah, um, maybe jumping in from this point too, and I am conscious of time, but I also want to make sure we have a conversation, sort of about any other issues that you would want to put on the table. One more issue that I think is evidently on people's minds when they think Colombia is the issue of security. You know, evidently, the country is a very different country than it was, you know, even just a decade or two ago, but that's not to say that Colombia is not without challenges in the space of security. And perhaps Phil, back into this conversation somewhere along the, the dividing line between security and compliance, you spoke about risks related to money laundering. You have offices here, you process, you know, you create jewelry, among others. I'm sure there are security angles to that. Maybe so, kick it off with you. Any thoughts you have around successfully managing security and compliance risks related to mining Colombia?

Yes, um, obviously Colombia does have a certain reputation for being a dangerous place, but in fact, that's largely unwarranted, I would say these days. Um, I've had any personal issues or problems operating there. Um, I know there has been some reason, the fact that, um, a lot of people have been disadvantaged by the pandemic. There's a certain amount of low-level crime that has picked up in recent months. Hopefully, that'll be a short-term blip.

One, one area we do find a little tricky is insurance. So, very often, insurance, it is quite difficult to obtain, quite expensive compared to, compared to the UK, I think because the sovereign risk is involved there. But yeah, certainly in terms of, I mean, our building is very secure where we operate from. We've never had any significant issues relating to theft or robbery. So, yeah, in terms of physical security, I think that it's actually a pretty decent place to operate in.

If I could just, if I could just jump in. Look, for mining, Phil, it's more on the upstream. On the upstream side, security is a key issue. And so, you'll find that all emeralds, or absolutely most emeralds, are transported from the mining areas to Bogota by helicopter. There's a reason for that. So, so, there is high levels of security, not only within the mine in terms of tracking individuals, in terms of searching people, but also in terms of transportation. Now, that is because you're dealing with a high-value product here. You know, you know, high-end, high-end Muzo, no oil, five carat could be $40,000 plus a carat. So we're talking, that's obviously cut. But to talk about something that could be quite significant, a single stone, rough stone could be $500,000, $800,000 in a very high-quality end. So, so that's the issue. That is part of the emerald industry. There are a lot of ways of dealing with that. We, in our Brazilian operation, looking to use optical scanning to reduce that kind of theft risk. But in terms, but it's just a case that one should be aware that that is one of the key risk factors and one has to structure a solution for it. There are solutions. That's, that's really all I can really say from the emerald side.

From a recent visit, I went to the Alpaton gold mine in Chocó, more to get understanding for the process versus involved there. I know that on that site, they had to pre-arrange a military presence. So, prior to our arrival, a squad of soldiers had to assemble around there, around the mine heads. So I think that, yeah, certainly there are, especially in more remote parts of the country, there are still some quite serious security concerns. But married to that, they do have, they do have the infrastructure and the hardware in place to mitigate some of those risks. So I think it's sort of six of one, half a dozen of the other.

Did you have thoughts on the security piece? Well, I would, you know, I will say, Oliver, then, I mean, I can only speak for our company that is in the exploration phase. We don't produce gold, so we don't have that issue at this point. Obviously, that will be quite different if we're producing ore or something like that. On the exploration situation side, we are, we're very happy to report. I mean, we have engineers and geologists in our team that, you know, coming from companies that were doing exploration 10, 15 years ago, and they report that the situation is quite different from them. They feel safe, they feel secure. You know, we don't have any shortage of bodyguards to, you know, we visit the property, we talk openly with the community. You know, we, you know, come every time I usually go to a project, I shake hands with the authorities and military authorities, but we don't have, you know, a security chief that it's back and forth. We take the battalions and the army's offices and the project. So, so that's, it's very, it's been very peaceful for us and our staff reports that the situation is very calm and very fluid with the community. So, so I'm very happy to say that and we can deny that the peace process agreement that was signed back in 2016 is doing a job from that promise of having security. That, as far as we are concerned, we don't know about other parts of the country, but as far as that part of Antioquia, the north-east part, I think it's very peaceful and calm. So we're very happy.

When I recently went to, in August, I went to Muzo. I visited some of the mines there with a geologist from CD Tech Laboratories. And as a Westerner, I was quite happy to walk around, no issues whatsoever, around the various mining operations there. And I was told that 20 years ago, if I'd gone there, I would have been in quite serious trouble. So, yeah, it obviously has moved on quite a bit and opened up to sort of, you know, to foreign investment and foreign involvement. So I think, yeah, it's definitely, it's definitely been on a journey.

Yep, thanks, Bill. And, and just to maybe echo that point, most certainly in terms of how the security environment has changed. And perhaps quite the contrary these days, we get clients, in some cases, less worried about what it looked like 20 years ago, but perhaps going to the other extreme and thinking that because of the peace agreement now, you know, security is no longer a concern. And I think it is very much still a concern, but it's one that's inherently manageable. To Chris's first points, you know, with the right setup and ultimately, you know, we talk to our clients about the security as a fixed cost into your into your planning, and then you'll take care of that issue, just like you will any other issue. So that's certainly something for investors to know about Colombia in the modern day and age is that security is inherently manageable, and that was perhaps not always the case a couple of years ago.

So I'm mindful of time. We are actually a little bit over, but I think this is a really good conversation. And I do want to evidently give you all the opportunity to talk about any maybe points that we haven't discussed until now. We spoke about some of the key risks that we frequently see coming up for investors, for operators, but I'm sure there are other things that you might have on your mind. So why don't we then start, Chris, maybe with you? Anything we haven't discussed? Any final thoughts you'd like to pass along to the audience?

Actually, I'm not really, in terms of, yeah, I think basically no, not really. I think we've managed to neatly cover all of them. I think the main thing here, it's all about community, maintaining balance. And then Colombia is a sophisticated society. It has a good mining authority, has good rule of law. And basically, it's a country that has come out of a transition. And I think it is extremely investment grade and somewhere that I would recommend coming to look at in terms of investment, certainly.

Thanks, Chris. Phil? Yeah, it's certainly, and it's certainly come a long way. For example, we're going through RJC, it's the Responsible Jewellery Council certification at the moment. And that's involves a lengthy audit process of all the supply chains that we were involved in and so forth. And yeah, that's something that, that, yeah, from my engagement with them, that certainly would have been much more challenging in the past. So I think, yeah, it's the future is definitely looking a lot more positive than the past. And I think there's certainly a lot of opportunity in a very sort of commodity-rich, people-rich country. I think it's something that certainly of, uh, you.

Phil, any final thoughts from you for the audience? Thank you, Oliver. No, I, my invitation to investors to come to Colombia, such a wonderful place. We've just moved the headquarters of the company from Bogota to Medellin. And you know, we're very excited. This is a wonderful city, very modern. You have an incredible supply of professionals, very professional people, high-quality professionals in engineering, in geology. They have very good schools in Medellin. And this is a very warm city. And I will invite everybody to come and stay, you know, and visit Colombia. I think it's a wonderful place to invest. Absolutely.

Yeah, great. Well, thank you, gentlemen, very much for your insights, for your experience. And I guess with that, we'll wrap up our panel. You can ask questions if you'd like by the chat function. I didn't see any come in here, but I guess otherwise, over to the team at the British Columbia Chamber of Commerce. Thank you very much for joining the panel. Thank you. Thanks very much. Thank you very much. Goodbye.

All right, to the moderator and panelists, and thank you very much without a doubt, an excellent reflection on Colombian case studies, their challenges, and opportunities. The panel questions, you may send the questions you have and also request the one-to-one meetings by sending an email to corporate@britishcolumbianchamber.com, indicating the company or companies you are interested in meeting with. Also, any additional information about these events or requests regarding this topic, they also can be requested through the email corporate@britishcolumbianchamber.com. And promotion. So, just to conclude the second day and last day of conferences of the Colombian Mining Roadshow, I would like to thank all the attendees, the participants, the participants. We appreciate your attention during both days and invite you to invest, invest in this amazing country. Thank you.