Gemstones & Pearls:NewsMine Sale Could Mean More Emeralds
New money behind an old mine may make some of Colombia's most coveted gems available again
One of the most famous and oldest emerald mines in Colombia is being sold, raising hopes that financing from the new owner will lead to greater supply. Chivor Mining Inc. of Canada plans to sell the mine to AZCO Mining Inc., a major player best known for its copper mining interests.
Since its discovery in the mid-1500s, the mountainous Chivor region of Colombia has produced high-quality, minty green emerald crystals relatively free of inclusions. However, production became sporadic in recent years as ownership passed through numerous hands.
After buying the site, Chivor Mining installed modern mining equipment and practices. But in the end, it decided to pull out because it had too little capital. The pending sale, expected to close this summer, is valued at $1.36 million in common shares of AZCO. (Chivor also agreed to extend AZCO an option to buy its shares at a nominal value of $.0001 per share.) Gem experts expressed surprise at the mine's low selling price.
AZCO is making a name for itself in colored gemstone mining. It also recently acquired an option to buy the Benitoite Gem mine in San Benito County, CA, known for producing the rare benitoite gem, the mostly violet/blue material that is also California's official gemstone.
AZCO's interest in Chivor is part of a trend toward large mining companies entering the gemstone trade, which could change the way gems are sourced. Most mines are smaller operations that get caught in a cycle where proceeds from one find are consumed in exploring for another one. Conversely, larger mining companies are well-capitalized and can continue to explore even when production is dry. They also have high-tech equipment, geologic know-how and formal production schedules.
The entry of larger mining companies also could change gemstone marketing. The larger companies recognize the benefits of selling value-added products such as faceted gems as opposed to just rough material and have the resources to develop these products.
by Robert Weldon, G.G.
Copyright © 1998 by Bond Communications.