Via EnergyandGold.com, The mining industry is continually depleting its inventory, which is why it has always been an M&A led business. Junior companies find and develop new deposits and then mid-tiers and majors take them out. This has been the way of the miners for generations.

There are few undeveloped high quality gold projects in the world currently, especially those that offer potential scale and long life. Even fewer of these deposits are high grade. Continental Gold’s Buriticá gold and silver project in Colombia is one of the richest gold deposits in the world, consistently ranked among the top gold development stories in the world by analysts. We had the opportunity to interview CEO Ari Sussman by Skype on Thursday, for an update on the exciting Buriticá project.

Scott Armstrong: Please put Continental Gold’s Buriticá project in the context of other undeveloped gold deposits out there? How does it stack up?

Ari Sussman: We are at the forefront of Colombia gold exploration and development and although I say we are at the forefront, Colombia as a country has a rich tradition in gold mining. In fact, Colombia is the oldest and richest producer of precious metals in Latin American history. The gold museum in Bogota is one of the great things to see if you are a precious metals buff, it has pieces dating back hundreds of years. It’s definitely worth visiting and seeing if you ever make it to Colombia.

The story of Colombia is really interesting and is full of geological potential. People get confused when they think of mining in Colombia and ask why weren’t there other major discoveries made over the past 30 years, prior to the very recent exploration successes. The answer is that Colombia went through a very difficult period of troubled security problem which inhibited foreign direct investment into natural resources. However, until former President Uribe and current President Santos There has been a drastic improvement and so what do we have in Colombia now? We have a country with as good of a political regime as exists in Latin America for foreign business practices to operate. In fact the Government political alignment has been pro-business oriented for more than 40 years. Couple this with an ever improving security situation since the turn of the century and you have an excellent opportunity to make resource discoveries.

Why do we like Colombia geologically? Well the obvious reason is the Andes mountain chain continues through Colombia and it turns out there has been little modern exploration done for metals, not just gold but for base metals and oil as well.

Additionally, Colombia sits above a triple plate junction where 3 tectonic plates coalesce. Some of the worlds largest mines are located in other countries with this setting style. It’s clear we’re at the beginning of a gold exploration renaissance, which of course has been through a difficult period during the past three years. However, similarities in this regard can be made to Peru from 1997-2001 or Chile a decade earlier. In fact, this gold renaissance only began in 2006 and I get asked this question a lot “Colombia, there’s really not a lot to show so far. There’s no new mines that have been built and nothing’s happened in Colombia.” I say wait a minute people, the average mine today from discovery to production is 18 years! That’s the timeline globally. From 2006 until today what has happened in Colombia in gold? You have our Buriticá Project which is 7,000,000 ounces of gold at high grade in all categories which is going to grow to well north of 10,000,000 ounces. You had a company called Ventana Gold which at the time of its purchase was around 3.5-4.0 million ounces. Eike Batista bought it and now it is purported to be north of 15,000,000 ounces. Lastly, you have AngloGold Ashanti, which made a discovery called La Colosa that is expected to grow to over 30,000,000 low grade ounces. All of these ounces were discovered from grassroots, with a much higher than average discovery rate based on meters of diamond drilling completed compared to most other countries within this very short time frame.

Our Buriticá project is the one that is going into production first. We are aiming to commence production in late 2017 or early 2018. We took over this project and started putting money into it in early 2010 which is when we listed on the TSX. So 8 years or so to reach production is a lot faster than the average project globally at 18 years. So there’s actually been excellent success in Colombia in a short time frame. Now obviously Colombia has suffered since 2011 when commodity prices peaked, but so has everywhere else in the world. As a consequence money has dried up and exploration efforts have slowed drastically. Most companies that didn’t find potentially economic projects have left the country to do something else. Today we are entering the smarter money phase in Colombia. This is the phase where we are starting to see deep pocketed majors with significant exploration budgets now looking aggressively to make or acquire discoveries of large-scale. Then there’s us at Continental Gold with our Buriticá Project and also our portfolio of earlier stage projects behind it which we think offer excellent potential.

Scott Armstrong: Is your plan at the Buriticá Project to develop the project to production yourself?

Ari Sussman: We would like to develop the project ourselves and have the team in place to do so but shareholder value comes first and we will ultimately pursue the path that is in the best interest of shareholders. I get asked a lot if we will sign confidentiality agreements (CAs) with other companies and I’ve always maintained that we will not entertain signing CAs until after we permit the project. The precedent has always been very clear in Latin America if you do sell a project the best value obtained is generally after permitting has already been completed.

Scott Armstrong: So where are you on the permitting front?

Ari Sussman: In Colombia you need a mining license and an environmental license to produce gold. We received our mining license in 2013, that’s a 30 year license, so we’re finished in that regard. Still outstanding is the environmental license and our guidance for completion of that has been for mid-2015 and we are on target to meet that guidance. So in a few short months we do expect to be permitted, sometime in the summer time.

Scott Armstrong: What are the biggest challenges for Continental?

Ari Sussman: There’s two sets of challenges: The actual challenges on the ground with the project and then there’s the perception challenge. Let’s take the perception challenges first. The perception of the market on Colombia is that you cannot permit projects and that is just dead wrong. It’s due to an unfortunate event involving a specific instance where a company was denied an environmental permit because they were operating on land, which at the time was deemed to be in a national park. That is a one off case and that’s an important point to make. If you look at Colombia there are dozens of small gold mines that are permitted and operating in the country. Also, the world’s largest open pit coal mine produces profitably in Colombia, along with many other large coal mines. BHP operates a very large nickel mine which, at one point, was the world’s largest nickel mine. The point is, Colombia has a tradition of permitting environmentally and socially responsible projects yet perception remains negative. However, once we get our permit I can assure that Colombia will be viewed as the country where you CAN permit, not the country in which you cannot.

The challenges which we have with the project itself, well it’s an underground mine so obviously there’s a lot of engineering that has to happen to bring this project to fruition. Our plan is to complete a feasibility study in mid-2016 and that will be our financing and construction decision point for Buriticá. However, if you follow our company you saw we announced a PEA (preliminary economic assessment) late last year and it was in the lowest quartile (costs) rendering it one of the higher quality unbuilt projects in the world. Our post-tax IRR was 31.5%, our net present value at a 5% discount rate was $1.1 billion and we outlined an 18 year mine life which produced well north of 300,000 ounces of gold per year in the first five years. It is a very robust high-grade project with modest capex and being underground, it will utilize a small footprint of land.

The real key to Buriticá, which I think is very important for investors to understand, is the scale of the project. Buriticá, hosts two vein systems side-by-side, which boast a remarkable vertical dimension. In fact, both vein systems have been drill tested down to 1.8 kilometers and remain open at depth. Also, both vein systems boast lateral strike lengths of at least 1 kilometer. Yet, the individual veins that were included in our resource estimates have much smaller dimensions than this. The reason for this, for the most part, is due to lack of drilling and we are confident that we are going to grow to well north of 10 million ounces of gold plus silver in time.

Scott Armstrong: Aside from the challenging overall market environment for junior explorers, how do you explain the poor stock price performance? What are investors not understanding?

Ari Sussman: I think it mainly has to do with this fear of not being able to permit. We are trading at a discount to our peers for the first time in a very long time, we had historically always traded at a premium given the quality of the asset and the high grade. I think this makes an excellent entry point for someone because of this discount and if you’re willing to bet on the company’s ability to deliver a permit as well as deliver overall growth of the resource I think the future looks quite bright. I should mention as well that we will be coming out with an updated resource estimate in the May/June time frame. We are looking to improve the internal quality of it, which means conversion of inferred ounces to the indicated & measured category. Also, we expect to deliver overall growth in terms of the total number of ounces of gold while maintaining the high grade status of the project.

Scott Armstrong: How much cash do you have, and what were the financing prices?

Ari Sussman: We have $67 million dollars US in the bank as of November 5th, 2014 and have a $30 million budget for calendar year 2015. We have enough cash to make it through the feasibility study in mid-2016 at which point we will go for project financing. The last financing was done in November of 2012 at $9.55/share.

Scott Armstrong: What is Continental missing in terms of infrastructure in Colombia right now?

Ari Sussman: We’re in a very infrastructure rich area, you drive to our project on the Pan-American highway and there is abundant electricity available in the area. But what are we missing in terms of infrastructure? The milling part of the site is going to be built at the base of a mountain and we need to bring a 6 kilometer paved road down to it, a short distance indeed.

Scott Armstrong: What should investors expect from Continental during 2015 in terms of milestones and accomplishments?

Ari Sussman: #1 Environmental permit #2 Updated resource estimate #3 Updated PEA during the 2nd half of the year #4 Drilling of new targets which I think is a big catalyst assuming we make a discovery of course and #5 We plan to list our shares in Colombia on the exchange.

Scott Armstrong: What kind of operating leverage will Continental have to a rising gold price and what is your all-in cost range on the Buriticá Project?

Ari Sussman: In our PEA we published costs, we didn’t do all-in sustaining costs because we don’t know all the variables yet. But total cash costs amounted to $389/oz for the first 5 years and about $415/oz over the life of the mine, these are lowest quartile numbers.

Scott Armstrong: Could you update us a bit on the security situation in Colombia?

Ari Sussman: Current estimates are that about 80% of the rural countryside in Colombia is safe to operate. There are some security hot spots left but these locations are generally well known and are away from more heavily populated areas. The main point with respect to security is that the statistics have been improving for years, in contrast to other countries in Latin America which are heading in the opposite direction.

Scott Armstrong: Are there any other juniors in Colombia which have caught your eye recently?

Ari Sussman: There are two. One is Red Eagle (RD.V) which is going through the permitting process as well and expects to complete permitting their proposed small gold mine at approximately the same time as Continental on roughly the same time schedule as for a proposed small gold mine at roughly the same timeline as Continental. Also, I want to mention Cordoba Minerals (CDB.V) of which Continental is a shareholder of and I represent it’s interest as Chairman of the Board. Córdoba has locked up a large land package covering a new porphyry belt in an area of excellent infrastructure. The Company made a grassroots discovery last year with some fantastic drill results including a hole at over 100 meters averaging well over 1% copper equivalent. This is a great early stage opportunity with a beaten up share price, there lots and lots of targets here if you are comfortable investing at an early stage.

Thank you for your time Ari and we look forward to following Continental Gold closely over the coming years as you move the Buriticá Project forward to production. Best of luck in 2015 to you and Continental!

Scott Armstrong of EnergyandGold.com, Guest Contributor to MiningFeeds.com