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Indiana Jones and the prospectors of Aim

Created:
13 June 2008
Written by:
Martin Li

Indiana Jones and the Kingdom of the Crystal Skull may not have received universal acclaim, but the film will surely resonate strongly with the chief executives of many companies traded on London's Alternative Investment Market (Aim). In this, the fourth Indiana Jones instalment, Indy sets off to remotest South America - described by the film's publicity as "a land of ancient tombs, forgotten explorers and a rumoured city of gold" - in search of the Crystal Skull of Akator, a "legendary object of fascination, superstition and fear".

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It won't come as any surprise that Indy isn't alone in his quest - hot on his heels is elite Soviet agent Cate Blanchett, also scouring the globe for the eerie Crystal Skull. What may not be so well-known is that many modern-day explorers are, like Indy, actively combing the Andes and Amazon in search of treasure: gold and silver and more prosaic, but also hugely valuable, treasures such as copper and hydrocarbons. And there's a lot of treasure being found.

South America is blessed with fabulous mineral wealth, although this blessing became a curse when the plundering Conquistadores landed on its shores in the 16th century. The Inca Atahualpa, captured at the beginning of the Spanish conquest of Peru, famously sought to secure his freedom by offering a huge ransom: filling with gold a room measuring six metres by five metres up to a height of two-and-a-half metres, and twice that volume in silver. To put that in context, experts estimate that all the gold mined in human history would fit within a cube measuring 21m on each side.

Investors might think South America has been largely denuded of its mineral wealth, following centuries of pillage. Not so. With silver gushing from its Cerro Rico ("Rich Mountain"), the Bolivian city of Potosi was once one of the wealthiest in the world. Yet, after centuries of mining, much silver remains - although the city had to be hurriedly added to UNESCO's list of World Heritage Sites after mischievous engineers opined that the large remaining resource would be most efficiently mined by blowing up the mountain.

Planning less spectacular mining techniques, International Consolidated Minerals holds a large, highly prospective property high in the stunning Peruvian Andes, close to some of the world’s largest copper-zinc mines. The property stands at over 4,000m and visitors are advised to spend a night at an intermediate camp before arriving at the mine, to help them acclimatise. A recent gold discovery adds to the significant silver, lead, zinc and copper previously discovered. Herencia Resources is prospecting for zinc, lead, silver and copper in the Chilean Andes, one of the world's most endowed mineral regions, particularly for copper.

South America also holds huge oil and gas reserves that modern explorers are starting to exploit. Amerisur Resources is looking to deliver near-term oil production in Colombia and is developing early-stage exploration in Paraguay. Gold Oil is prospecting in Colombia and Peru. Pan Andean Resources holds significant Peruvian acreage, with attractive farm-in deals and heavy oil projects in Colombia, close to Venezuela - one of the world's most prolific heavy oil provinces.

The Andes and Amazon are not only hugely prolific in natural resources, they also boast some of the most stunning and culturally-charged locations anywhere of the world. Although investors must always apply cold, hard logic to every potential opportunity, when prospective returns are comparable with - if not better than - many other regions, why not invest in destinations that will ignite your senses as well as (hopefully) your bank balance? As Indy has proved so often during his adventures, you can mix business with pleasure.

MORE SMALLER COMPANY COVERAGE...

Read more SmallWorld columns, devoted to smaller companies and their managers, on the SmallWorld page

Read more articles and share tips for Aim companies on the Aim companies page.

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