Madre Tierra Digging Deep To Find The Gold

by | Oct 6, 2022 | Boardroom Investing

 

 

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Have you ever wondered whether “X” really does mark the spot? You’re not alone.  

Many have been intrigued at the thought of profiting from treasures buried in the ground we walk upon, such as rare minerals and precious metals.  And the company we are presenting today is uniquely positioned to pursue an opportunity in this niche that has existed for at least 7000 years!

Yes, we are talking about GOLD and the company is Madre Tierra (“Mother Earth”) – a Canadian-incorporated gold mining and brokerage company operating in Colombia.  Its goal is to monetize gold discoveries through mining, exploration, and by profiting from brokering the gold discoveries made by local small-scale and artisanal mining companies.

In this report, we will take you through a brief history of gold, gold mining, and treasure-seeking to understand how Madre Tierra has built a business in history steeped in adventure, mystery, and untold riches.

Gold Fever 💰

While individual empires and civilizations have come and gone, gold has remained an element of constant value ever since the first gold mining over 7,000 years ago and when ancient Egyptians first mined gold over 5,000 years ago. The first gold coin was minted in Lydia, in what is now Western Turkey, in the 6th century BC.

The potential riches from mining in general have often made headlines in more recent centuries – . from the discovery of the Cullinan Diamond in 1905 (a 1.37 POUND raw diamond!) to the California Gold Rush, which began in 1848 when James W. Marshall, a carpenter of Englishman descent, found gold just north of Sacramento, California. 

The news of the gold rush eventually brought around 300,000 people to California from the rest of the United States and abroad. This influx of gold into the money supply reinvigorated the American economy at a much needed time.


Image source https://loc.getarchive.net/media/miner-panning-gold-1


As exciting as these events were, the problem with these occurrences is that they’re rather rare, and although many people have rushed to find their own fortunes, often to their demise, very few actually have.  And yet there are mining companies who to this day profit from the discovery and brokerage of gold, precious minerals, oil, and diamonds in the ground from known producing areas.

So how do these mining companies succeed?  The keys to succeeding on any reliable scale from gold mining tend to rely on combinations of:

  1. Mining in  known-producing areas  with enough deposits of gold ore.
  2. Having the expertise, mining equipment, and investment necessary to actually get the gold out of the ground.
  3. Brokering deals that get the raw gold to commercial buyers (although you might buy a ring to woo your sweetheart, bet they’d not thank you for delivering a truckload of gold ore on their doorstep! The raw gold still needs refining and turning into what you or I would recognize as gold.)

Madre Tierra (affectionately shortened to “Madre” at times in this report) does or has plans to do all of this in a very smart way, which we will explore in the next section.

Madre’s Business Model

Setting up a commercial mining operation isn’t cheap. One detailed estimate published by MIT in 2016 said, “Opening a mine and separation plant can cost from $500 million to $1 billion, depending on the location, element, ore grade, and a variety of other factors.” 

So unless you have a spare BILLION laying around this is not the type of business for a startup to practically consider. The risk of not finding substantial reserves of gold from such an investment is immense, and the interest on such a loan alone would be an immense burden for any startup.

But Madre approached this opportunity differently. 

Madre’s business was founded by building relationships and collaborating with already established artisanal miners and small-scale mines. It then acts as a broker for those mines based on what they unearth. 

This is very smart because it puts Madre Tierra in the gold transaction at reduced risk without first requiring massive investment in mining equipment. And because it is working with already-established local miners, the company can immediately benefit from local knowledge, expertise and know-how.

In terms of its own gold mining, Madre approached this opportunity by focusing on one area in the Santa Rosa Del Sur area – the leading gold production municipality in Bolivar, Colombia.





Its business idea is quite simple: work with local mines in a region that has a rich history in the industry and with prime gold reserves. This positions the company well for successful gold trading, exploration and mining long into the future.

But there is one area – one might even call it the “elephant 🐘in the room” – that we had to look into further, as many investors might wish to consider this.

Though Madre Tierra is incorporated in British Columbia…it operates in Colombia.

“But what about all the things I’ve heard and read about in Colombia?” you might say… 

Even today the U.S. State Department advises you to reconsider traveling to Colombia. So, maybe don’t travel there! (Although Columbia saw 4.5 million foreign visitors in 2020 alone, and with more than 100 hotels, restaurants, and bars set up through foreign investment.) But let’s remember that this is a business opportunity, not a travel destination recommendation.

OK, so what about business???  Are there any decent companies doing business in Colombia? Plenty.

Established companies doing business in the country include Occidental, BP, Coca-Cola, Exxon Mobil, Drummond (coal mining), Dole (Colombia’s largest employer), Philip Morris and Bell Helicopter.  

Further, Colombia generates $2 billion annually from its agricultural exports. According to PBS, it is the world’s second-largest flower-exporter (after the Netherlands); the world’s third-largest producer of coffee; and the world’s third-largest exporter of bananas. 

Colombia is also rich in minerals and precious metals and gemstones. Gold, as well as emeralds (Colombia is the world’s largest producer of emeralds) and nickel, have played an important role in Colombia’s GDP and foreign trade in the last 20 years. 

Colombia has a well-known gold mining sector, and minerals overall represented about 5 percent of GDP and 42 percent of total exports (2006). However, production of precious minerals is still small-scale despite high international prices for minerals such as gold.



And Madre Tierre chose an area for its operations where mining is the main activity that the people of both the Santa Rosa del Sur and Montecristo communities are engaged in as their livelihood. Within this area, the community treats gold titles as highly respected and rely on consistent, stable enforcement of the law to protect their community’s interest in this important industry.

This tendency for small-scale production plays well into Madre Tierra’s business plan of working with local gold miners and brokering deals for them. It also helps dispel any historical concerns about western companies coming in and robbing a country of its natural resources to the detriment of locals.

By establishing cooperation and partnerships with local miners and communities, Madre Tierra’s goal is to create sustainable wealth for everyone. Through its approach to gold mining, it is opening a new opportunity to investors by being socially and financially responsible.



Madre Tierra’s Gold Mining Area

As touched on earlier, Santa Rosa del Su, Bolivar, is in the southern Bolivar region and is recognized by its high gold deposits. According to the company, geological potential in the region indicates average gold grades ranging from 2.4 g/t up to 48.1 g/t. A minimum of 2.5 g/t (grams per ton) is usually considered the minimum for gold mining to be worthwhile.

Madre Tierra has secured all mineral rights for the area for 18-plus years. And a mining license can be extended for an additional 30-year term with no archaeological, environmental or forest-related restrictions. A gold trading license allows management to accelerate revenue generation.

Further, there is a long history of gold production in the area. Multiple new and established companies, including B2Gold, Braeval, Cabia Gold, and Ashmont, already have investment and exploration in the region.

The Colombian government proactively encourages foreign investment (such as by Madre) by smoothing local regulations, improving security, and helping with cooperating with and managing local communities. Not only can foreign companies invest, but Colombia allows 100% foreign ownership of mining titles and companies.

“When there is a safe, welcoming investment climate with good government, transparent rules, American and Colombian companies together do great work. They provide real jobs with real prosperity that lasts.” – Mike Pompeo, United States Secretary of State, September 2020.


Added to this, Madre Tierra secured one of only 24 Columbia gold trading licenses, allowing it to serve as a broker to artisanal miners and small-scale mines in the region.

While Madre is building its own mining and exploration operations, it can become immediately active through these brokerage opportunities. This helps to generate immediate revenue and cash flow without having to rely on just its gold mining operations. Smart.

Madre Tierra works with artisanal miners and small-scale operators to bundle together purchases of smaller-scale gold production for sale into the international markets. With its license, the company can buy gold from the Colombian countryside at a discount while selling it at international spot prices. This spread pricing will help to profit local communities and miners and for the company’s shareholders on each batch of gold it buys and trades. This means they are already financing their strategic and operational ideas immediately through brokering these gold deals without depending on raising capital from investors for costly equipment and infrastructure.

According to Madre, gross margins on gold purchases and sales range between 15%-25%, which can help Madre build a solid return with minimal investment and then use these sales to plow back into the business to further its gold trading and build its mining infrastructure.

The benefits to the individual small-scale and artisanal mining companies are demonstrated by the way that Madre Tierra’s business model cuts out many layers in the usual process of gold mining, as demonstrated in the graph below:




Investing in Madre Tierra

Madre Tierra is currently open for investing using Regulation A+ (AKA “Crowdfunding”) with a minimum investment of $1,000. The company could definitely make a nice addition to the startup portfolio of any investor using crowdfunding as part of their investment strategy.

Reasons investors may wish to consider Madre Tierra include:

  1. Madre is brokering gold deals and mining in a known gold-producing area, not speculating whether there is gold in the area.
  2. The company has one of only 24 unique gold trading licenses in the whole of Colombia.
  3. Mineral rights are secured for 18+ years, with the option to renew for an additional 30-year term. There are no archeological, environmental or forestry-related restrictions.
  4. There is full support from the Colombian government and strong relationships within the local community.
  5. There is high grade geological mapping, geochemistry, and geophysics. This means that Madre Tierra will use technology to verify if there are any gold deposits before it starts mining.
  6. Madre has a diversified investment strategy, building business through profitable gold brokerage sales whilst building its mining infrastructure.
  7. The management team has over 30 years of diverse experience in the mining industry.

In sum, Madre Tierra’s goal is to create sustainable wealth for everyone in the chain of gold, right back to the local miners. By taking the currency and wealth of the past with a smart approach, Madre seeks to revolutionize the traditional approach to the gold mining industry and introduce a new opportunity to investors.



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