AngloGold Ashanti, the world's second-largest gold producer, is reportedly sitting on one of the world's 10 largest gold reserves after a massive discovery in Colombia.
Colombian daily El Tiempo last week reported that the deposit lied some 40 minutes from Ibague in the central province of Tolima and had the potential to double Colombia's gold production by 2011.
While the Colombian government had been asked not to reveal the details of the project until February, Colombia's president, Alvaro Uribe, let slip that the site would require an investment exceeding $2-billion and would generate about 1,200 jobs.
According to El Tiempo, AngloGold Ashanti started exploration work from the village of La Luisa four years ago.
"Residents of the village also said that a foreign company had started to buy several farms in the area in early 2007," the newspaper reported, adding that the company had recruited over 350 locals to date.
The find is also regarded as key to reviving Colombia's flagging gold industry, placing it firmly among the world's top-producing countries.
Colombia's mining and geological institute Ingeominas reported that gold production fell from 37.7 tons in 2004 to just 15.7 tonnes in 2006.
Mining authorities have earmarked the area south of Bolivar as having strong potential with only five per cent of the gold reserves mined there so far.
The country's other large gold mines are located in Antioquia, which produced 49,000 ounces of gold in 2006, and Caldas, where production last year was 25,000 ounces.
But AngloGold Ashanti, which has an active exploration programme in Colombia, declined to comment on El Tiempo's report.
Company spokesperson Charles Carter was quoted by Associated Press as saying it was "premature to discuss" any of the company's specific findings.
Active in Colombia since 1999, the company reported that it made significant progress in the exploration of its extensive tenement position in the country last year, both through its own exploration activities and through its preferred joint venture partner strategy.
Company's primary focus
Colombia, along with Western Australia and the Democratic Republic of Congo, were primary focus areas for the company last year.
The replacement of production ounces through near-mine (brownfields) exploration and new discoveries (greenfields) continues to be a high priority for AngloGold Ashanti, as it is for many of the gold majors.
During 2006, the group's total exploration expenditure amounted to $103-million, of which $52-million was spent on brownfields exploration.
The remaining $51-million was primarily invested in the three key greenfields areas of Western Australia, DRC and Colombia.
Exploration expenditure is expected to reach $163-million in 2007, with $77-million being spent on brownfields exploration and $86-million spent on greenfields exploration. AngloGold Ashanti's shares were trading 3.19 per cent or 9.50 rand lower at 288.50 rand on the JSE.