Forbes Reports on Mineros SA’s Growth Strategy: “These Are Mineros S.A.’s Plans to Capitalize on the Gold Boom, Now Trading Above US $3,300”

With gold established as a safe-haven asset, Mineros S.A., under new leadership, is poised for significant growth through a strategy focused on cost optimization, increased production, and stronger regional presence.

When Sun Valley Investments AG—a private firm specializing in natural resources and the mining industry across the Americas, Europe, and Asia—announced the acquisition of 22.5% of Mineros S.A. shares from Grupo Colpatria at the beginning of last year, it had a clear vision.

Sun Valley, co-founded by Vikram Sodhi, an Indian origin investor educated at Yale University in the United States and involved in founding several firms managing over US $2 billion in metals, mining, and affordable housing transactions, launched two subsequent Public Tender Offers (PTOs). These moves raised its stake in the Antioquia-based mining company, which operates in Colombia and Nicaragua, to 57.42% following a total outlay exceeding COP $500 billion in both transactions.

With gold firmly positioned as a refuge asset amid financial market volatility driven by tariff wars, the metal’s price reached record highs of US $3,500 per ounce in April. This affirmed Sun Valley’s winning bet, which yielded record results in 2024 and in the first quarter of 2025. A new PTO launched at the end of May, targeting up to an additional 11%, could bring its stake to 68.42%.

Last year, the company—which utilizes dredging to extract gold and silver from alluvial deposits in Colombia and underground mining in Nicaragua—reported revenues of COP $2.2 trillion and a net income of COP $354,104 million, based on the production and sale of 213,245 ounces of gold at an average price of US $2,387.

This trend intensified in the first quarter of 2025, with revenues of COP $671,240 million (US $160 million) and net income of COP $159,228 million (US $38 million, up 127%), driven by record gold prices and the production and sale of 54,243 ounces at an average price of US $2,881—21% higher than the 2024 average.

“This is undoubtedly a great moment for Mineros,” said David Londoño, who assumed the role of company president in April. “Our outlook for the remainder of 2025 is to continue focusing on the projects currently underway in both Colombia and Nicaragua, aimed at strengthening the operational continuity of our production mines.”

In the most recent investor call following the release of first-quarter results, Londoño stated that his leadership will prioritize operational optimization to enhance performance and reduce costs.

“Near-mine exploration yields the best results; deposits are always found where mining activity has previously occurred,” he explained. “This is our approach, and that’s why we are ramping up exploration in both countries this year,” added the mining engineer with more than 35 years of industry experience.

With resources and reserves that ensure a 10-year production horizon and 1,039 direct employees in Colombia, the company has the potential to increase production by 70,000 to 130,000 ounces annually, reaching between 350,000 and 500,000 ounces per year.

To achieve this, in Colombia, the company is advancing exploration campaigns near its influence area in the Bagre-Nechí region in Caucasia, aiming to extend the life of this alluvial operation.

In Nechí, production in the first quarter increased by 21% compared to the same period in 2024. During this period, 2,420 meters were drilled across 83 boreholes, representing 25% of the original drilling plan.

In Nicaragua, where the company has operated since 2013 with three processing plants and several mines, production at the Hemco property declined by 5% between January and March.

Despite focusing on organic growth, Londoño does not rule out acquiring operational projects if they add value to Mineros S.A.

Mineros holds a 20% stake in the La Pepa gold project in northern Chile, where Pan American Silver is the majority shareholder. However, in October 2022, the company opted not to exercise its second option to acquire an additional 31% interest.

In a country where over 70% of alluvial gold is extracted illegally—impacting 63,000 hectares—Londoño notes that illegal mining has intensified due to high gold prices, fueling informal mining in the Nechí region and northeastern Antioquia.

“Our priority is to develop formalization programs and bring more miners into the legal framework,” the executive affirmed, reiterating the company’s commitment to shared value creation and ethical, responsible, and sustainable mining.

While Londoño admits that forecasting gold prices is challenging, market volatility leads him to believe the current price levels could persist for another two to three years.

Regarding a draft government decree that proposes increasing the gold purchase withholding tax from 1% to 2.5% and introducing a 4.5% self-withholding rate for gold and other precious metal extraction, Santiago Cardona, Mineros’ Vice President of Operations in Colombia, stated the measure could initially impact the company’s cash flow by US $3 million—an amount expected to be recovered subsequently.

“We are not Gold traders, and we are reviewing the potential impacts with the Colombian Mining Association (ACM),” Cardona said.

However, César Díaz Guerrero, a spokesperson for international gold traders, warned that the decree threatens the viability of a sector that provides thousands of jobs throughout the formal mining value chain.

According to DANE, Colombia’s national statistics agency, gold exports surpassed US $3 billion last year, with an estimated 50% channeled through international trading firms.

Despite the challenging environment, Londoño remains optimistic about the company’s outlook. Mineros announced an annual dividend of US $0.10 per share and holds US $81 million in cash reserves.

“We don’t control gold prices, but we do control our costs and performance,” the executive emphasized, highlighting Colombia’s significant geological potential based on its mineral reserves and current international price context. However, he noted that sustainably leveraging this potential and maximizing national benefits requires addressing the challenges of illegal mining and its environmental and social impacts.

Regarding permit renewals for Nechí Aluvial, he explained that the company holds an approved environmental management plan valid through 2027, allowing operational flexibility. Nevertheless, it is also developing a viability strategy in other titled areas in coordination with Corantioquia by expanding formalization initiatives.

“We do not use any chemical reagents to extract gold; we recover it purely through gravity,” Londoño concluded. “At Mineros, we are committed to going beyond regulatory requirements, actively pursuing innovative and sustainable solutions.”

Read the original article in Forbes published on Jul 1, 2025: Click here.