Maria Consuelo Araujo CEO Gran Colombia Gold

Maria Consuelo Araujo
CEO Gran Colombia Gold
Latin American Mining: Government, Investors and Communities Aligning for Success
November, 2012
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EXPECTATIONS
Government
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Progress
Sustainable development
Royalty payments & Taxes
Economic growth
Foreign direct investment
Responsible mining
November, 2012
Investors
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Security
Growing production
Permitting
Fair taxation
Clear regulations
Legal & contractual stability
Communities
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Employment
Participation in decision-making
Social Investment
Social responsibility
Sustainable programs
Local entrepreneurship
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LATAM-POLITICAL TRENDS
Centre / Centre Right
Centre left
Socialist left
November, 2012
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THE LATIN-AMERICAN TIGERS
Colombia & Peru
2011 growth, Peru 6.9% Colombia 5.9%
Improvements in political
stability
Several resources in energy and mining
Economic growth in next 5years ~
5% - 7%
“Youthful population,
Growing middle class,
Relative low debt,
Dynamic Economic Expansion”*
A MARKETWATCH special report by The Wall Street Journal
(July, 2012)*
November, 2012
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THE GOVERNMENT’S ROLE
• Maintaining stable regulations
• Clear rules of the game
• Encourage open international
trade and free markets
• Promote a legal environment
and formalization of the small
miners
• Competitive tax environment
• Focus on a long-term
November, 2012
FAIRNESS & STABILITY
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RANKING OF COUNTRIES FOR MINING INVESTMENT
Fiscal
Regime
Economic
System
Political
System
Social
Delays in
Steady
Corruption
Conflicts Permitting
Currency
Source: Behre Dolbear Group 2012 ranking of countries for mining investment - where “not to invest”.
November, 2012
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LATIN AMERICA IS EXPECTING A BOOM IN INVESTMENT
$ 250 Billion
Expected to be Invested in Mining Projects in Latin America in 2020
Argentina
$ 10B
Brasil
$ 58B
Chile
$ 75B
Colombia
$ 22B
Ecuador
$ 7B
México
$ 13B
Panamá
$ 9B
Perú
$ 56B
Total
$ 250B
*Elaborado por www.cesco.cl a partir de diversas fuentes (Ibram, SNMPE, Asomineros, Camimex, Secretaría Minería Argentina)
CESCO (Centre of studies of copper and mining, Chile)*
November, 2012
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INCREMENTAL INVESTMENT IN EXPLORATION
November, 2012
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MILA: INTEGRATED MARKET IN LATIN AMERICA
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Integrated Market: Integration of
Equity Markets in Chile, Colombia and
Peru
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The integration provides: greater
supply of securities, issuers and larger
sources of funding
1st in the region in number of issuers
2nd largest in market capitalization
3rd in terms of trading volume after Brazil and Mexico
November, 2012
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INVESTOR: REASONS TO INVEST IN LATIN AMERICA
 Continually improving investment
climate
 Expand free trade zones
 Network of free trade agreements with
other economies
November, 2012
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INVESTOR: REASONS TO INVEST IN LATIN AMERICA
 Investor Protection
RANKING OF INVESTOR PROTECTION
 Security
 Overall ease of doing business
Source: The Word Bank - Doing Business in South America
November, 2012
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SUSTAINABILITY
Community and Government Relations
Stakeholders
Strong Engagement
Government
Partnership
License to
Operate
Community
partners
Business benefit
Social benefit
Continuous Improvement
November, 2012
COMMUNITIES
Building reputation – The Gran Colombia Model
Communities
• Identify interests and needs
Government
Media
• Strong communications
• Team work
Employees
Investors
• Long term perspective
• Building trust and confidence
Small Miners
November, 2012
Suppliers
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INVESTING IN THE COMMUNITY
Good Neighbours
Open Communications
Water
Education
Leadership
&
Entrepreneurship
Mercury
Global
Initiative
Including
Small
Miners
Health
InfraStructure
Transparency & Human Rights
Contributions
November, 2012
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MINING THAT MAKES THE DIFFERENCE
Community Relations Process
What are my requirements / guidelines for business?
Who is our community and what are their needs?
Surveys / Assessment Tool / Consultation
needs
Are our external affairs activities aligned?
Is there a gap?
Guide / action / spider diagrams / Determine
priorities Evaluation of CR programs
Do we have any risk scenario?
Risk review
Develop a External Affairs and CR Plan
Plan to close the gap
Secure the support of the company /
Implement
Annual budget
Make annual reviews to continuous improvement
November, 2012
Process evaluation
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COLOMBIA
Canada’s new best friend
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5th largest economy in Latin America
Steadiest GDP growth in Latin America 1970-2007
$8.88 in infrastructure investment through 2012
Stable democracy, 70% government approval rating (1)
Most secure Latin American country to do business(2)
Ranked 7th in Countries for Mining investments(3)
2nd best investor protection in Latin America (Forbes)
1. Source: Canaccord Genuity: The Colombian quarterly 2.World Bank, Doing Business 2010 and 2011 Reports 3. Behre Dolbear Group 2012
November, 2012
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GRAN COLOMBIA GOLD
POSITIVE AGENT OF CHANGE FOR COMMUNITIES
 Paid Pension Liabilities to Frontino’s employees of US$203 million
 Contributed ~US$2 million to fund Phase II construction of the El Llano
Hospital, school and other community projects
 Follow Global Compact principals in Corporate Social Strategy
 Follow IFC guidelines for Marmato Resettlement
 Community attention offices opened
 Legalized and granted land ownership to more than 800 families
A member of CBSR
Canadian Business for
Social Responsibility
November, 2012
Using consulting firms of high
reputation: BSD Consulting and Social
Capital Group
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POSITIVE AGENT OF CHANGE FOR COMMUNITIES
Third Party Miner Contracts
Third Party Miner Contracts
 Agreements with 20+ third party miner groups
Outcomes
 Mine narrow, high grade veins
 Environmental benefits – GCM controls
processing, reducing mercury use
 GCM pays for recovered Au at spot price
 Employment – expanded workforce
 Contractors manage miners & fund own costs
 Improved health & safety
 GCM processes ore and sells gold & silver
 Workers receive health & pension benefits
 GCM provides health & safety training
 Government receives tax & royalties
November, 2012
www.grancolombiagold.com
November, 2012
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