Heraldic achievement of Indomitus Industries

Bolivia

Jim Rogers on Bolivia at New Orleans 2004
Luzon Minerals Profile
Apex Silver
Nacion Camba
Rigidity
Hiding Places
Secret

From Special Report on New Orleans 2004

Doug's speech was followed immediately by a bullet briefing or teaser by Jim Currie of Luzon Minerals. Many of these teasers were sprinkled throughout the conference program, but this one happened to be especially well timed. Luzon is exploring for, and has found gold on its property in Bolivia. So it was timely to hear about this opportunity just before Jim Rogers stood up and said that Bolivia, Western Brazil, northern Chile, and Southern Peru were much like Colorado in 1875, a place of tremendous opportunity for anyone seeking a great fortune.


From Special Report on New Orleans 2004

The morning general sessions over, we went to listen to Jim Currie on Luzon Minerals. You'll recall from our discussion of Friday evening's presentation by Jim Rogers that Luzon is exploring in Bolivia. Several drill holes at their Liphichi property look quite promising, including one showing 120.5 meters of 0.87 g/t Au, 15 meters of 3.74 g/t Au, and 6 meters of 7.43 g/t Au. Another hole showed 133 meters of 1.76 g/t Au, 44 meters of 3.93 g/t Au, and 7 meters of 16.03 g/t Au. As well, the company has good relations with the local "campesinos" and miners.

From Peck of Salt

The story on Luzon Minerals is not quite as impressive. The company had only Canadian $447,000 last we checked. They did option from Vista Gold 100% of a property in Bolivia with some 652,000 ounces of proven or indicated gold and some 15,000 ounces inferred, with a further probable reserve of 444,000 ounces. The company has some 40.8 million shares fully diluted, based on our understanding of their financial reports. We derive a value per share of US$4.84 to US$9.97 for their assets at $452/oz for gold. The company has liabilities of about $65K. Their market capitalization is a scant C$9 million.

However, we are very interested in the prospects for Bolivia as a gold mining location. There is a good exploration story on the company's property at Liphichi which the company has optioned to own 100%. The property is a geological analog to the Bendigo District in Australia. The mines at Bendigo operated from 1854 to 1953, producing 22 million ounces of gold; an Australian company has consolidated the district and delineated a further 11 million ounces of gold under the old workings. Luzon is working with Bendigo Mining's geological consultant, Dr. Simon Dominy on sampling protocols for Liphichi.

At Liphichi, gold occurrences have been found over a strike length of 14 kilometers and over a vertical extent of 700 meters. Gold is found in quartz veins and stockworks in association with stibnite and arsenopyrite. Previous drilling and channel sampling have shown a mineralization structure of up to 50 meters width, grading up to 5 grams per tonne. Luzon has embarked on underground tunneling and drilling at Liphichi and has refurbished an existing adit. Drill bays have been installed in the footwall and hanging wall of the structure and drilling is being done on fifty meter centers.

The Amayapampa project in Bolivia is the aforementioned project optioned from Vista Gold. Vista performed feasibility studies there in 1997 and again in 2000. Vista has proposed mining the deposit at Amayapampa at a rate of 2,330 tonnes per day, using open pit mining to produce an average of 41,000 ounces per year at a cash cost of $168/oz. The initial capital cost, including working capital, is estimated at $26 million. The measured and indicated resource is 12.6 million tonnes grading 1.61 grams per tonne Au. The resource was delineated by 19,971 meters of RC and diamond core drilling and 5,355 meters of underground channel sampling. The project is fully permitted. The company is negotiating with the indigenous people of the area to allow use of the surface lands required for the project.

Of course, the opportunity with these exploration companies is to buy into the process of discovery at an early stage. Provided the discoveries are substantial, and don't fall into what our friend Rick Rule calls the "small mine trap" the opportunity can be very substantial. Of course, another aspect of Rick's advice is that very few of the many thousands of geological anomalies that are discovered each year ever become mines. So, it is important that an exploration company be looking for large deposits, preferably in places where large deposits are found. In this way, the return may be large enough to reward for the substantial risk involved.


From Camba

      "El Movimiento Nación Camba de Liberación is a civil society organization that has among its fundamental objectives ratifying the fundamental principle of the Free Determination of Peoples, with the end of giving to the Camba Nation the power of decision to exercise full sovereignty over its economy, its territory, and its culture."

      - "Who We Are," Nación Camba.

What does it mean, "camba?" The term is the lowlanders' word for themselves in Bolivia. This word is in contrast to "Kolla" which refers to someone from the highlands of Bolivia. Cambas appeal more to cultural identity whereas Kollas refer more often to ethnic identity.

What are the grievances of the Camba which "impel them to the separation"? The Camba site says, "In general, Bolivia is known as a fundamentally Andean country, surrounded by its mountains, a sort of South American Tibet, mostly inhabited by Aymara and Quechua people, backward and miserable, where prevails a culture of conflict, communalism, pre-republican, illiberal, collectivist, conservative, and whose bureaucratic center (La Paz) practices an execrable colonial centralized State that exploits its 'internal colonies,' that expropriates our economic surpluses, and imposes on us the culture of underdevelopment, its culture."

The Camba nation claims 30% of the population and 70% of the territory. Maps are available here They claim a literacy rate of 93%, the fifth largest production of soya in the world, and a city of Santa Cruz with 1.2 million souls.

Santa Cruz has rejected Bolivian president Mesa's decree, and is moving forward with a referendum on independence 12 August 2005. Evidently, this bid for independence is being taken seriously. A hard line Trotsky-style communist, Roberto de la Cruz "the leader of CONIOB and counselor of M17," has called the Camba people "the Nazis and Croatians of Santa Cruz." Typically, such claims would be assigned by a Trotskyite to any group that respects private property, individual liberty, or free market economics. De la Cruz wants nationalization of the country's hydrocarbon resources, presumably to be followed by general nationalization of everything else. He adds that he has been recruiting young military reservists from 18 to 30 years of age to go and raise the "whiphalas" - the flag of the highlanders - in Santa Cruz.

It is interesting that the Camba nation maps indicate a separate sovereignty where Tarija is located. Which leads inexorably to the question, where is the San Cristobal mine located?

San Cristobal is SouthWest from Uyuni on the road to Chile. It appears well served by rail lines into both Chile and Argentina, per this map. This area is well within what the Camba map identifies as "Alto Peru" and nowhere near either the Tarija autonomous region or the Camba region.

And what of our friends at Luzon Minerals? Their Liphichi site in Bolivia is located 110 kilometers northWest of La Paz, Bolivia in the Cordillera Real. Again, well within Alto Peru and nowhere near Camba nor Tarija.


From Rigidity

      "Outside elements, including politicians and organizations like COTEL [a La Paz phone company] are financing a large part of this week's protest demonstrations. We have photos and video to prove it."

      - Saúl Lara, Minister of Bolivia's Government, 29 May 2005.

One of our friends on GoldMoney's DGC-chat discussion list is Craig Spencer. He reports frequently about the news in Bolivia, where he has many contacts. Recently, he pointed out that some five million Bolivians want to leave the country, preferably for the United States. He wondered if there might be some libertarian and objectivist Americans ready to make the reverse journey.

Meanwhile, the dialog on the protests in La Paz has begun to sound pretty funny. Apparently one of the phone companies is paying for protestors to run around demanding the nationalization of the oil and natural gas resources various major international production companies have been finding and pumping. One does have to wonder what this phone company would do faced with rioters demanding the nationalization of all phone company resources.

Meanwhile, Francisco Navajo, president of the civic committee of Tarija, Bolivia has declared that the region "lives in an inalienable spirit to decide its own destiny, choose its own authorities, and administer its own resources." He spoke out against centralization, isolationism, and poverty.

A peek at the atlas shows Tarija is in the very South of Bolivia, at the intersection of a road from Paraguay and a main road into Argentina. It is somewhat mountainous.

In December 2004, an article in El Deber mentioned that the 9 staffers for customs in Tarija are "insufficient" and have no effective support from the government. A related article in the same issue reported this bafflement:

    "It is difficult to understand. All these people care about is contraband and easy money. Security is forgotten and they do what they want," said a customs officer in Puerto Suarez who prefered not to be identified for fear of reprisals.

Yes, that has always been a tough one, understanding why people like easy money. I seem to recall a rock song on the topic, "Smuggler's Blues," with the lyric, "It's the lure of easy money, it's got a very strong appeal."

Jim Rogers likes Bolivia and the surrounding region, which he likens to Denver in the 1870s. Certainly, Denver at that time was host to a few rowdy individuals who enjoyed easy living. Some of them might even have done a bit of smuggling, from time to time. Bolivia seems like a wide open place, full of opportunity, and no doubt fraught with many dangers.

Craig also reports that Apex Silver is putting six hundred million dollars into a zinc/silver/lead mine in Bolivia. From my brief look, Apex is a solid opportunity with about $160/share value including cash, minus debt, plus the proven and probable lead, zinc, and silver with huge allowances for production costs on top of the $600M mine. Look for our suggestion on this stock next issue, or just snap up some shares at $12.55 now!

In our last issue, we used the term "Montagnard" to describe certain Vietnamese refugees. It has come to our attention that a more appropriate term is "Hmong" which is the way these people identify themselves. Anyone on a mountain could be a "montagnard," and one is cognizant that the French colonial period in Indochina was not noteworthy for being pleasant for the occupied peoples of the region. We regret the error.


From Hiding Places

      "Mennonites have a culturally international outlook, staying abreast of where in the world they might live undisturbed. One indicator of where one might start a new country is to look at where North American Mennonites are moving and where there are concentrations of their settlements. One place is Latin America."

      - Dennis Feucht, March 2005

Near the end of March, one of my old friends from the space activist community sent along his thoughts on new country developments. His particular focus has been some of the prospects in Latin America, which he discusses below. Given several inquiries from folks looking for places to live in Latin America, I've decided to review his comments here.

One of the interesting issues Dennis has looked at is identity. He writes, "In a true community, our identity is established through personal relationships. These solid friendships are antithetical to how the System would have people relate to each other, as strangers who base their exchanges on ritually presenting identifying papers, which offer the illusion of a trust substitute." That seems quite cogent and correct.

Dennis continues, "Unlike the Mennonites, a technologically advanced new country can also apply countermeasures, such as blinding spy satellites with lasers and building multi-zone security systems around settlements. Surface-to-air missiles are not terribly hard for a couple of engineers to design and build. Nor would guided RPGs be. A successful security system for new settlements, however, would not have need of such desperate defense means. The best defense is to not be perceived as a prospective target."

Here, I'd have to disagree with Dennis. Tools do not in of themselves signify desperation. Rather, having useful tools like lasers, missiles, and grenades indicates preparedness. Fortune favors the prepared, just as God helps those who apply their talents to self-betterment. Having useful tools does not indicate desperation. Using tools for good purposes, such as self-defense, is in no way bad.

The best defense is not to be perceived at all. That also makes for fine opportunities in offense.

The old Chinese curse, "May you live in interesting times and come to the attention of important persons," comes to mind. How could anyone who takes an interest in his situation fail to live in interesting times? But there are several ideas for avoiding the attention of self-important, arrogant, system-managing bureau-rats and politicians.

One idea from Dennis, "A network of inconspicuous settlements distributed throughout a region or continent may constitute a unified community in the 21st century, connected by transportation and communications technology and invisible geopolitically and geographically. The most difficult aspect of the distributed approach is to maintain cohesiveness while physically separated. The Mennonites do this through commitment to a shared worldview and much travel. Settlements in Canada, Mexico, Belize, and Bolivia interact sufficiently to maintain the loose ties that characterize a libertarian form of distributed country (not state). The distributed approach calls for "outside-the-box" thinking about new-country formation. Historically, we have considered countries as states: a (largely) contiguous plot of land demarcated by geographic boundaries. A country should be defined by the common characteristics of its people. Where the land we live on is located might not be as important as our relationships to each other."

One of the key opportunities of the Internet is the distribution of business activities of all sorts. It is useful, but not essential, to have people in direct physical proximity for meetings and exchange of information. Certainly, a great deal of information is conveyed in voice, facial, and body communications. Posture, expression, and tone of voice all contribute to convey extremely nuanced meaning. Even smell can play a role in generating comaraderie and understanding, as powerful emotions generate olfactory sensations, and smell is deeply tied to memory.

As useful as getting together or being near enough to provide combat support may be, there is much that can be done from a distance. Virtual offices are becoming more and more sophisticated, with encrypted file sharing, encrypted voice, and encrypted web video.

So, where to look for places to live? Dennis writes, "In South America, Bolivia, Paraguay, and Uruguay are attractive countries for Mennonites. Over fifty colonies exist in Bolivia alone."

Bolivia has already been the focus of previous reports in this series. Clearly, some clever and conscientious people have seen Bolivia's potential. (As a follow-up to the possibility of Bolivia splitting mentioned in a recent report, we note that the La Paz government recently sent the military to Santa Cruz to occupy it and "protect" it.)


From Secret Cabals

      "We think Bolivia is an overlooked country. Like any country it has its good and bad points. ... It could be that interest from bank accounts is tax free, that personal income is tax free, that taxation is low for business, that laws, rules, and regulations are mild for business, that it does not have a government top heavy economy."

      - CitizenShip Bolivia

It isn't clear to us what "could be" is doing in that sentence about taxes. Perhaps the "taxation is low for business" and "regulations are mild for business" would not be definite, but there is certainly no income tax. According to the site's page on Bolivia's government, "There is no personal income tax. Their legislature passed an income tax once. The Bolivians showed their displeasure so persuasively that the income tax was repealed about one week later."

So, what's the idea here? We were contacted this week about potentially profiling this site and the related Nexus Bolivia. These folks offer professional assistance in residency, citizenship, passport, and relocation efforts involving Bolivia. If you need help with renting a car or buying one, they have people on the ground in Bolivia who can help. If you are considering relocating your business to Bolivia, you should certainly stop by their web sites.

Citizenship is comparatively inexpensive. Fees may range anywhere from $2,000 to $14,000 depending on the particular approach to citizenship. "The bottom line is that Bolivian citizenship is competitive and cheaper in just about any way with other low priced countries, except the beach part." Being landlocked, Bolivia has few beaches and no ocean front properties.

The CitizenShipBolivia.com site is a very nice compendium of information about Bolivia. For example, there are thirteen free trade zones in Bolivia. There is no daylight savings time. The government is in La Paz, but the legal capital and home of the judiciary is in Sucre. Foreign embassies are in La Paz, and there about twenty-five countries with embassies and consulates.

For those interested in travel to Bolivia, the site lists all the countries for which no visa is required, or visa without special authorization. Most Western Hemisphere and European countries citizens may enter Bolivia without any visa.

But, of course, the idea here is to offer Bolivian residency and travel documents. So, what comes with a Bolivia passport? You can enter the following countries without a visa: Argentina, Brazil, Chile, Colombia, Paraguay, Panama, Peru, Spain, and Uruguay. All you need is your passport or identity card.

You can get a second citizenship with Bolivia without having to renounce your existing citizenship. You can also, of course, get Bolivian residency and a "cedula" or residency card without abandoning your existing citizenship. Residency cards are renewed every six years.

Clearly the most interesting page on the site is the lengthy essay, "Introduction to Bolivia." It is also the least accessible, apparently linked from the home page right of center, but not in the persistent menu at left. The final paragraph of this introduction is the most insightful.

"Bolivia is not and never is going to be a solution to the dreams of freedom seekers. Ten years ago it appeared to be headed for a prosperous, rather capitalist future. Now, politically, it is wallowing in the self-destructive socialist mire, again. Ten years from now prospects may be looking up again. In the mean time, it is a place you can live safely and comfortably without being subject to the strictures and threats of an all-powerful, totalitarian welfare state. No one should go to Bolivia without a keen awareness of all its many faults. But, the lower inertia, greater flexibility, and higher autonomy of Bolivian civil society leaves room for a future in which those faults might be ameliorated; this is a hope that simply does not exist in a more 'developed' country."

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