Gold has been fluctuating at high levels for months amid the slow global recovery, doubts about the future of the U.S. dollar and ongoing fears surrounding European debt contagion. With the pressures of these factors continuing to mount, many are making bets on the precious metal. China, the world's second largest gold consumer, is among them. Gold bar investment demand in China is expected to rise to over 270 tons in 2011, double what it was last year.
A recent report from Bloomberg indicates that “Chinese buyers are still looking for ways to diversify their portfolio and hedge against the macro uncertainties.” These factors combined with the investment scope of the world’s second largest economy could help gold continue to maintain its current levels or drive it up even further. Among the beneficiaries of the growing demand will be mining companies, which offer an inexpensive equity based entry point into the gold trend.
Market Vectors Gold Miners ETF (GDX), which tracks the price of gold is closing in on its 52-week high, up over 3 percent in today’s trading alone. The healthy direction could persist if gold demand continues to reflect the tenuous economic environment. Samaranta Mining Corporation (SAX.TSXV) could stand to benefit from the strong trajectory and the factors that seem to be driving demand. Samaranta is a resources exploration and development company actively exploring for gold and other precious metals with a main focus on Colombia.
Samaranta possesses the unique advantage of having its interests in Colombia. Colombia is vastly under explored and as a result offers tremendous potential many other mining nations do not. Recognizing the factors that set Colombia apart and the economics driving gold and what has essentially been a decade-long bull run, Samaranta, has been aggressively expanding its holdings there in the hopes of generating additional sources for profits.
The company’s most recent interest is a 117,647 hectare area in the Colombian department of Choco, situated on the border between Colombia and Panama. Choco has a rich history of gold mining beginning in the 1600’s and has served as a chief source of income in the area. It’s Samaranta’s intention to leverage that potential into revenue, which they made clear with their recent letter of intent in the area.
Should the company be granted the access they’re looking for, Choco could be the latest source of interest in the area. Beyond Choco though, Samaranta acquired an 80 percent interest in the 14,300 hectare Siguire property in the historically prolific Birimian Greenstone Belt in Guinea, West Africa and continues to investigate its Guadalupe property. Surveys of the latter have revealed promise on the site, indicating Samaranta may be well positioned for the ongoing enthusiasm for gold.
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