Itronics Reports 78 Percent Sales Increase in Fourth Quarter and a 29 Percent Increase for 2017

January 23, 2018 Posted by admin

RENO, Nev., Jan. 23, 2018 (GLOBE NEWSWIRE) — Itronics Inc. (OTC:ITRO), a diversified fertilizer and silver producing green technology Company, today summarized its operations and diversification progress and announced total fourth quarter sales increased 78 percent on a 39 percent increase in fertilizer sales, and a 7,815 percent increase in silver sales.  Full year sales increased 29 percent on a 20 percent increase in fertilizer sales, and a 5,138 percent increase in silver sales.

Total Revenues for the three months ended December 31, 2017 were $419,038 compared to $235,945 in the same period in 2016.  Total Revenues for the full year ended December 31, 2017 were $1,850,379 compared to $1,439,878 in the same period in 2016, a 29 percent increase.

The year 2017 marked transition for Itronics during which the Company’s new five times scale up pilot leaching reactor was started up and the Company succeeded in getting its breakthrough e-scrap refining process operational.  The start of e-scrap refining marks the beginning of Phase III of the Company’s e-scrap refining study which began in 2015.  Silver sales are starting to provide an expanding non-seasonal sales component to mitigate the seasonality and weather influenced variability of GOLD’n GRO fertilizer sales.
                                                                                   
Now that test refining of e-scrap has begun, the Company is expecting silver sales to make a significant contribution to total sales in 2018.  Growth in GOLD’n       GRO fertilizer sales in 2018 will expand total sales even more.

A bullion shipment and a shipment of silver-copper bearing glass were settled in the third quarter, and two shipments were settled in the fourth quarter 2017.  Sale of the glass completes proof of concept for the breakthrough e-scrap refining process and validates that the e-scrap can be completely converted to saleable products and thereby eliminated from the environment.  Itronics has now proven its second “zero waste” technology and non-seasonal silver product sales are expanding.     

Eighteen months ago the Company produced its first 1.5 ounce button of Silver bullion from e-scrap.  Recently the refinery poured its first 500 ounce bar of silver bullion from e-scrap and has since made a shipment of 500 ounce bars to its finish refiner which will be settled in the first quarter.

In 2017 the prices of copper, zinc, silver, gold, and palladium increased sharply, in some cases to multi-year highs. Many forecasters are predicting that gold and silver prices will significantly increase from current levels.  Copper and tin are at multi-year highs.  The Company is now producing silver bullion that contains silver, gold, palladium, copper and tin and expects to benefit significantly as production is expanded and metal prices continue to increase.

In the first quarter of 2017 the Company’s subsidiary, Whitney Whitney, Inc., staked 28 lode claims at the Fulstone Project to expand coverage of the high-grade zinc anomaly it announced in early 2015. A new confidential project report was prepared, and based on discussions intended to identify a joint venture development partner for the Fulstone Project an update of this report was being prepared at year-end with completion scheduled for January 2018.  The updated report identifies five target areas and recommends a 10-hole investigative drill program consisting of two drill holes for each target area.

In the second half of 2017 the Company conducted a detailed preliminary investigation to determine if the new KAM-Thio technology would be able to leach residual silver and gold and eliminate the residual cyanide from ore that had been leached with cyanide.  On October 17, 2017 Comstock Mining Inc. announced that it was working cooperatively with Itronics on this project. Itronics summarized preliminary results of this work in a press release on December 19, 2017.  The results were very encouraging and the investigation is expected to be continued in 2018.

The Company continues to receive and review inquiries and expressions of interest in participating in developing one or more of its “Zero Waste” technologies.
                       
Twelve Month Sales Results

Unaudited Revenues for the fourth quarter, and 12 months ended December 31, 2017 together with comparative figures for 2016 are presented below:

Operational Developments

The Company is diversifying and further integrating its operations by developing a portfolio of core breakthrough “zero waste” technology extensions to establish year-round non-seasonal sales in new markets and produce internally generated raw materials for use in the GOLD’n GRO fertilizers. The Company’s plan is to operate its technologies and to expand the scale of operations as funding and market conditions permit.

In September the City of Reno issued a new five-year “zero discharge” operating permit for the Company’s factory in Stead, Nevada.  The new permit includes requirements to be met for obtaining an additional five-year operating permit for the manufacturing and research development operation.  The Company owns and has been operating at its Stead location for 17 years and is pleased to have the continued support from the City of Reno for its operation and expansion plans.

Nevada is continually showing that it is a business-friendly state with well-known tech companies including Apple, Google, and Tesla moving to northern Nevada.  The influx of new and the expansion of existing manufacturing companies in northern Nevada has produced a significant increase in land values.  The Company’s manufacturing plant in Stead, Nevada is a major asset and is strategically located near a rail siding, which is next to the Reno-Stead Airport, and has significantly increased in value over the past year.  We expect this property to continue to increase in value because of the influx of large tech manufacturing and distribution companies in northern Nevada.

GOLD’n GRO fertilizers. The Company’s hydromet processing is now recovering iron and sulfur for use as raw materials for manufacturing GOLD’n GRO micronutrient zinc fertilizers.  Elemental sulfur is also being produced.  The elemental sulfur is being evaluated to determine its best use as a raw material or product going forward.

In March 2017 Itronics announced that its goal for minimum stable storage of four years for its GOLD’n GRO micronutrient fertilizers has now been demonstrated to exceed eleven years, which opens up national and international sales opportunities.  The Company’s current sales are regional in the California markets.

GOLD’n GRO micronutrient liquid zinc fertilizer is now stable enough so that a customer from anywhere in the world could purchase the fertilizer, ship it a long distance, hold it in a warehouse until needed, and then use it or distribute it to farmers or farm retailers for seasonal needs.

A potential customer can justify purchasing GOLD’n GRO in larger quantities for use over more than one fertilizer season due to freight cost savings that greatly exceed the interest cost of the funds used to make the purchase.  The freight savings make this a profitable transaction for United States based customers, both distributors and growers. The Company believes that this interest cost savings compared to shipping cost would apply to foreign purchasers as well.

In May 2017 the Company placed a consumer fertilizer, GOLD’n GRO 6-3-9+4% Sulfur, for retail sales through Buy Nevada First Gift Shop, located at 4001 S. Virginia St. in Reno.  The fertilizer is a plant food for use on house plants and garden plants and has been generating on-going sales.  Due to the enthusiastic customer response to this fertilizer, the Company has added a lawn fertilizer, GOLD’n GRO 20-1-7+3% Sulfur, to this retail offering.  This fertilizer is for lawns and can be used for fertilization from early spring to late fall.  The Company started this retail program in response to many northern Nevada customer requests.

In 2016 The Company identified a potential new environmental benefit that may be obtained by using GOLD’n GRO fertilizers to reduce the uptake of cadmium from the soil by vegetable crops.        

The Company’s distributor performed field tests in 2016 that demonstrated that two of the GOLD’n GRO fertilizers, when applied together, are able to reduce cadmium uptake from high cadmium content soil by broccoli and romaine lettuce to a level of “non-detect” in harvestable plants. Two application approaches have been identified to reduce cadmium soil availability to the plants.  The Company is providing support for field testing on spinach to further develop this new technology.
           
Silver Production.  The Company has begun a fourth refining campaign which includes incorporating ground up personal computer circuit board scrap (e-waste) to provide quantitative data that is being used to evaluate the feasibility of refining e-scrap to recover its silver, gold, palladium, copper, and tin content.  This work is on-going and is now producing silver bullion and silver-bearing glass.  This production is non-seasonal and will increase Itronics sales as production continues and expands in 2018 and future years.

The FeLix, SuLix leaching technology pilot operation five times scale up is fully operational for use for batch leaching.  It is being used as a pilot-scale batch operation to separately leach iron and sulfur from the low grade silver concentrate produced by the Company in its photoliquid desilvering operation. 

The leaching recovery process is being expanded into three separate processes. Separation of iron in liquid form, separation of sulfur in liquid form, and separation of elemental sulfur. The residue that remains after the three process steps is a high grade silver concentrate which is delivered to the silver refinery for use in e-scrap refining.

Now that e-scrap refining is underway, the Company plans to focus on expanding the FeLix, SuLix hydromet pilot plant and improving its operational efficiency in 2018. 
           
E-scrap processing feasibility study.  In the second quarter 2015 Itronics announced that it had started a feasibility study to determine whether e-scrap (personal computer circuit boards) processing can be integrated into the new refining operation.  The Company is gathering quantitative processing information to determine the operating parameters needed to expand the operation to recover commercially meaningful amounts of copper, silver, gold, palladium, and tin from e-scrap.

The Company’s strategic joint venture with Disability Resources New2U Computers, which employs people with disabilities, is providing a reliable supply of circuit boards that have been stripped to the Company’s specifications for processing.  The Company has entered into an agreement for sales of its silver bullion, and a separate agreement for sales of its silver-copper bearing glass.  With these agreements in place, the financial terms are known and sales can be increased as production expands.

Improvements to the refining operation were made to increase per melt production from the furnaces by 35 percent in the fourth quarter.  Plans are being implemented to further expand per melt production approximately an additional 40 percent in the first quarter 2018 by adding an e-scrap grinder to the operation.  Further production expansion using the existing furnaces may be achievable as more operating experience is gained. 

Research into availability of e-scrap in northern Nevada has identified a large enough supply of circuit boards (e-scrap) to support a 100 times increase in the Company’s pilot scale e-scrap refining operation.  The Company has now begun planning to expand the pilot operation in stages, by adding more furnaces, to increase the capacity of the operation by at least 100 times.

In 2017 the Company began Phase III of this study which is to operate the refining process on a pilot scale.  The objective of Phase III is to optimize the new refining process and to develop enough operational knowledge so that a plan for expansion to larger scale commercial scale operation by adding more and larger furnaces can be developed.

KAM-Thio Process Development.   The KAM-Thio technology is being developed by using one of the already proven and field tested GOLD’n GRO fertilizers.  Development of this technology is expected to add non-seasonal chemical sales to the silver/gold mining industry, and possibly for use in other industries for cyanide neutralization.

Laboratory tests conducted by the Company have demonstrated that KAM-Thio has the ability to leach silver from the silver bearing glass slag generated by the Company’s silver refinery.  The tests have also demonstrated that KAM-Thio liquid is stable in the leaching application.  Independent laboratory tests have demonstrated that KAM-Thio is able to neutralize the cyanide contained in spent cyanide solution generated by gold-silver leaching.

The amount of KAM-Thio required to neutralize cyanide is in a range appropriate for leaching gold and silver from ore.  The Company began to evaluate this on cyanide leached ore samples in the second half of 2017 using samples provided by Comstock Mining Inc. from its Virginia City operation. The bulk of the analytical work needed to measure silver and gold in all test samples is being performed by an independent laboratory.  The work is on-going and an understanding of how KAM-Thio works on cyanide leached silver/gold ore is being developed.  The Company’s plan is to perform similar tests on samples of unmined ore to determine if the KAM-Thio technology can replace cyanide at the Virginia City mine.

The Company’s plan is to introduce and operate the KAM-Thio technology through licensing joint ventures with mining companies that have suitable silver/gold deposits and leached mine tailings that need remediation.  Study of the requirements to actually use KAM-Thio leaching at a mine site indicates that a recovery system consisting of leaching followed by metal recovery will have to be developed.  The new processing system will include neutralization of residual cyanide in the ore that is being treated making this a revenue producing environmental remediation process that is non-seasonal.  

Zinc Flue Dust Process Development.  An Itronics press release dated March 17, 2015 announced a technical breakthrough by successfully testing electrowinning as a process to recover metallic zinc powder from zinc enriched liquids that are produced by leaching zinc oxide from zinc bearing flue dust.  The innovative zinc recycling technology Itronics is developing is expected to eliminate the waste completely by converting all components to saleable goods (a new “Zero Waste Technology).  The process being developed may use up to 40 percent less electrical energy compared to conventional zinc refining. The potential energy savings would be a strong economic driver for the project.  This work was put on hold in the second half of 2015 while higher priority projects are being completed.

The zinc price has recently been at a multi-year high and is expected to stay in the range of its current price or trend higher.  This increase in zinc price makes development of the zinc flue dust recovery technology more desirable to the Company due to cost savings that could be achieved by using recovered zinc to replace primary zinc that is currently purchased for manufacture of the GOLD’n GRO zinc micronutrient fertilizers.

The Company’s smaller leach reactor system is now available to be used for the necessary pilot scale leaching test work that must be completed to perfect the new process.  A time table to proceed with this work has not yet been established, but sustained higher zinc prices will provide an on-going economic incentive to activate this project.  The Company has reached agreement with a zinc flue dust producer who will supply material for testing once a decision is made to proceed with this development project.

Battery Recycling Evaluation:  The Company is studying the potential use of the electricity generating contents of silver batteries and “non-rechargeable” alkaline batteries as a source of raw material for use in manufacturing the GOLD’n GRO fertilizers and for silver production. Once the Company has completed the testing and start-up of e-scrap refining, it will evaluate processing of silver oxide batteries which have to be crushed or ground up prior to introduction into the refining furnace. Processing silver oxide batteries would increase the silver feed to the refinery for use in refining e-scrap and would be non-seasonal.

Alkaline batteries contain potassium, zinc, and manganese.  The potassium and zinc are recoverable using Itronics’ leaching technology and are raw materials needed for manufacturing GOLD’n GRO fertilizers.   The manganese remains in the solid residue from leaching. The Company has begun laboratory evaluation to develop leaching technology to solubilize manganese.   The work has produced some positive results.  The lab work is currently on hold due to higher priority work that needs to be completed to support on-going pilot scale operations.
           
Auric Fulstone Project. An Itronics press release dated January 20, 2015 announced that its subsidiary, Whitney Whitney, Inc. has identified surface high grade zinc-lead-silver mineralization at its Auric Gold Minerals Fulstone copper-gold exploration project in Nevada.  Within the Auric Fulstone project area, the Company has discovered surface high grade zinc, lead, and silver mineralization that contains anomalous molybdenum in a large area that is geochemically anomalous for zinc. It has also discovered high grade copper mineralization that contains anomalous gold and molybdenum in a separate area that is anomalous for copper.  Discovery of the potential for significant zinc, lead, silver, and molybdenum mineralization increases the economic attractiveness of the project by adding potentially significant near surface zinc, lead, silver, and molybdenum values to the over-all copper and gold values that are expected to be identified as the project is explored.

At the end of 2016 Auric Gold Minerals received an advance from a project partner for the purpose of staking up to 28 additional lode claims to expand the claim coverage of the high grade zinc anomaly that has been identified in the Fulstone Project Area.  The claims were staked in the first quarter 2017.  In the second quarter, an update of the confidential Fulstone project technical report was started and was completed early in the third quarter.  In the fourth quarter, a second update of the Fulstone project report was started and is scheduled for completion in January 2018.  The updated report identifies five target areas and recommends drilling two investigative holes in each target area.
                                                                       
The Company is continuing to evaluate options for developing this project and is discussing joint venture development with potentially interested parties.  Copper, zinc, and silver are all at multi-year highs which is stimulating investor interest in getting development of this project funded and launched.

About Itronics
Headquartered in Reno, Nevada, Itronics Inc. is a “Creative Green Technology” Company which produces GOLD’n GRO specialty liquid fertilizers, silver bullion, and silver-bearing glass. The Company’s goal is to achieve profitable green technology driven organic growth in specialty GOLD’n GRO fertilizers, silver, zinc, and minerals.  The Company’s technologies maximize the recovery and use of metals and minerals and by doing this maximize sustainability.

Through its subsidiary, Itronics Metallurgical, Inc., Itronics is the only company with a fully permitted “Beneficial Use Photochemical, Silver, and Water Recycling” plant in the United States that converts 100 percent of the spent photoliquids into GOLD’n GRO liquid fertilizers, silver bullion, and silver bearing glass. This is internationally recognized award winning “Zero Waste” Technology.  The Company is developing a portfolio of environmentally beneficial “Zero waste” processing and mining technologies.  Itronics has received numerous domestic and international awards that recognize its ability to successfully use chemical science and engineering to create and implement new environmentally green recycling and fertilizer technologies.

The Company’s environmentally friendly award winning GOLD’n GRO liquid fertilizers, which are extensively used in agriculture, can be used for lawns and houseplants, and are available at the Company’s “e-store” on Amazon.Com at:
 https://www.amazon.com/Goldn-Gro/s?ie=UTF8page=1rh=i%3Aaps%2Ck%3AGold%27n%20Gro  

         Due to expanded retail customer interest, GOLD’n GRO fertilizer may now be purchased in Reno, Nevada at “Buy Nevada First Gift Shop,” 4001 S. Virginia St.

Follow Itronics on Facebook: https://www.facebook.com/itronicsinc
                              Follow Itronics on Twitter: https://twitter.com/itronicsinc                                                 

VISIT OUR WEB SITE: http://www.itronics.com

 (“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This press release contains or may contain forward-looking statements such as statements regarding the Company’s growth and profitability, growth strategy, liquidity and access to public markets, operating expense reduction, and trends in the industry in which the Company operates.  The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in the Company’s filings with the Securities and Exchange Commission.  The Company assumes no obligation to update these forward-looking statements to reflect actual results, changes in risks, uncertainties or assumptions underlying or affecting such statements, or for prospective events that may have a retroactive effect.)

Paul Knopick
888.795.6336
           

Article source: https://globenewswire.com/news-release/2018/01/23/1299271/0/en/Itronics-Reports-78-Percent-Sales-Increase-in-Fourth-Quarter-and-a-29-Percent-Increase-for-2017.html

Tracking Europe’s waste: ‘There’s gold in them landfills’ – Reuters

January 22, 2018 Posted by admin

OSLO (Reuters) – Some of Europe’s richest deposits of valuable materials are in the trash, ranging from gold in smartphones to cobalt in electric car batteries, according to a survey of urban mining published on Wednesday.

Scrap vehicles, batteries, computers, fridges and other electronic and electrical waste total about 18 million tonnes a year and contain materials worth billions of dollars, the report said, urging more recycling.

A smartphone, for instance, has a concentration of gold 25 to 30 times that of the richest primary gold ores, according to the study, “Prospecting Secondary Raw Materials in the Urban Mine and Mining Waste” (ProSUM).

A database (urbanmineplatform.eu/) tracks and predicts flows of materials in 30 European nations, from sales to the dump.

“This is one step closer to a circular economy,” Pascal Leroy, project coordinator and head of the non-profit WEEE Forum based in Brussels that promotes recycling of waste electronic and electrical equipment, told Reuters.

“We’ve been doing the prospecting stage,” Jaco Huisman, of the United Nations University and ProSUM scientific coordinator, told Reuters. He likened the project to geological surveys for deposits of materials from copper to silver.

Each European, the report says, would own 250 kg (550 lb) of electronics – 3.5 times the average adult weight – along with 17 kg of batteries and almost 600 kg of vehicles if all equipment now in use were shared out.

It predicts, for instance, that a shift to more electric car batteries and more electronics in vehicles will make car junkyards more varied in a shift from metals such as steel and aluminum.

“For the first time we will see how the battery, electronics and vehicle sectors relate to each other,” Huisman said.

With sales rising, it shows that electric cars will become a source of materials such as neodymium, lithium and cobalt in coming years, especially in Norway, France, Germany, Britain and the Netherlands which have been early adopters.

Last month, another study showed that the world’s electronic scrap in 2016 contained 55 billion euros ($67.29 billion) of valuable materials, most of them squandered because of low recycling rates.

Researchers last year detected 3 tonnes of silver and 43 kg of gold in effluent and sludge from waste water treatment plants – amounting to around 3 million Swiss francs ($3.1 million).

Still, costs of recycling waste and rapid switches in technology deter investments in urban mining. “What can be very valuable now may not be worth much in a couple of years’ time,” Leroy said.

Wednesday’s study shows, for instance, how waste copper found in old-fashioned cathode ray screens has been falling across Europe since a 2011 peak with the shift to flat screen televisions and computers.

Eastern European nations may still be a good place to find such copper because countries in the region have lagged a shift to flat screens which contain other materials such as indium.

Editing by Matthew Mpoke Bigg

Article source: https://www.reuters.com/article/us-environment-waste/tracking-europes-waste-theres-gold-in-them-landfills-idUSKBN1F61YH

‘Blood gold’ in your jewelry is poisoning workers and the rainforest. Here’s how to stop it.

January 21, 2018 Posted by admin

Illegal gold molded into our wedding rings, dangling around our necks and hidden in our smartphones is polluting the rainforest with toxic chemicals and exploiting workers in Latin America.

Gold miners have stripped roughly 415,000 acres of South American tropical forest, an area twice as big as New York City, according to researchers at the University of Puerto Rico — and the rate of deforestation is only getting worse.

In Colombia, teenagers swim in mercury-filled pools of water as they use powerful hoses to suck up gold, an investigation by Massachusetts-based nonprofit Verité found.

Pope Francis brought his moral authority to the crisis on Friday when he visited Peru’s epicenter of illegal gold mining, Madre de Dios.

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“I want everyone to hear God’s cry: ‘Where are your sister and brother slaves?’” the pope said of the human trafficking that supplies miners and sex workers for the industry. “There is so much complicity. And it’s a question for everyone.”

Solutions won’t be easy — but they exist.

“There are ways of mining gold without mercury, without massive deforestation, without child slavery,” said Douglas Farah, a national security consultant who has studied illegal gold mining.

To stop the unrelenting environmental and human devastation, an array of competing interests will have to collaborate to extract gold in a more humane way, according to workers’ rights advocates, environmentalists and industry experts. In the mix of this crisis are large multinational companies that use gold in their products, American consumers, U.S. and foreign law enforcement agencies, non-governmental organizations, precious-metals refineries and the miners themselves.

Complicating matters further: Violent Latin American drug traffickers who have infiltrated the industry seeking to launder money.

Miner+a Ilegal en Nari+o_ Colombia by JMBB 040_01

The kind of sweeping change needed to clean up the gold industry has happened before, experts say — take “blood diamonds.”

Today, no company wants to buy or sell diamonds that contribute to violent conflict. That’s because consumers, advocacy groups and world governments woke up to the havoc caused by their extraction — and pressured big companies not to trade them anymore.

It worked. Since 2003, more than 75 countries, including the United States, have signed onto a United Nations-backed accord called the Kimberley Process that certifies diamonds as “conflict-free,” meaning rebel groups do not profit from their sale.

The campaign “brought the issue to people’s attention in ways that people like myself never thought possible,” Farah said. “I think the same thing is entirely possible with gold” — if consumers demand greater transparency.

In from the cold

Without more stringent precautions, American consumers should be aware “there is a strong likelihood that a percentage of gold in their jewelry or electronics comes from illegal gold mines,” said Quinn Kepes, program director for Verité, which investigates abuses in the international gold industry.

The implications are huge: Nearly three-quarters of gold imports into the United States come from Latin America.

In southeastern Peru’s vulnerable Madre de Dios region, illegal miners have invaded pristine Amazonian rainforests and turned them into “toxic deserts” where wildlife cannot thrive, said Luis Fernandez, a tropical ecologist at Wake Forest University’s Center for Amazonian Scientific Innovation.

Machines chew up the forest, digging 30 feet down into the soil and then sifting for gold. The mining work leaves behind massive piles of dirt and rocks that clog up riverbeds. The waterways are poisoned by mercury used to separate gold from rock.

“It completely destroys the area,” said Fernandez. “You don’t expect these areas to reforest in hundreds of years. There’s no more soil. You’re basically doing strip mining on a massive scale.”

135GoldCol00 NEW PPP

In Madre de Dios, where Fernandez’s center runs a research laboratory, aerial imagery shows hundreds of thousands of acres have been deforested.

Much of the damage is happening in national parks and ecological preserves.

“It would be the equivalent of having thousands of acres of illegal strip mines in Yellowstone National Park — and the government not being able to stop it,” Fernandez said.

He and a team of researchers are leading efforts to study how to reforest such a devastated ecosystem, including using charcoal-enriched soil to grow vegetation again and testing a mix of 40 native plant species for their viability.

“How do you reforest something like that?” Fernandez said. “We have to figure how to do this efficiently and cost effectively.”

One of the most horrific byproducts of illegal mining: widespread mercury poisoning.

Gold miners in the Amazon region pollute rivers and lakes with more than 30 tons of mercury every year, according to the Global Initiative, a New York nonprofit that researches organized crime.

Artisanal miners have used mercury for centuries. They mix rocks containing gold with the toxic chemical to form an amalgam. Then they heat the mixture, burning the mercury away — sending it into their own lungs and the environment — and leaving behind gold.

Pits left by miners fill with mercury-contaminated water — and local people sometimes use those pits to farm fish, Fernandez said. His research shows that across Madre de Dios — where there are tens of thousands of small-scale miners — three in four people suffer from dangerous levels of mercury. Indigenous tribes are particularly vulnerable, he said. They are three times as likely to suffer from elevated levels of mercury as other residents.

Prolonged exposure to the chemical can harm nervous, immune and digestive systems, and lead to respiratory and kidney failure and even death.

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In Colombia, criminal gangs threaten small gold miners

Subsistence gold miners in Colombia get hit from all sides. The criminal gangs who extort money from them. The multinational companies that dominate the industry. The government that they say wants to regulate them out of existence.

Pedro Portal, Edited by Matias J. Ocner

pportal@miamiherald.com

Many miners are only vaguely aware of the health risks posed by mercury, just like tobacco smokers of previous generations, said Kevin Telmer, executive director of the Artisanal Gold Council, a Vancouver-based organization that advocates for improving the conditions and practices of artisanal miners.

Telmer said convincing miners to stop using mercury is not as daunting as it might seem.

While mercury is fast, cheap and yields gold immediately, some of the precious metal is lost in the process.

“You’ve got to give them a solution,” he said.

A big incentive: mining without mercury makes miners more money because more gold is recovered, according to Telmer.

“We typically get a 30 percent lift in their recovery,” he said. “If it’s going to induce a pay cut, they’re not going to be interested.”

The Artisanal Gold Council has launched three pilot mining projects, including one in Peru, to showcase mercury-free methods of extracting gold.

These include basic gravity techniques such as panning, shaking tables and centrifuges. Large-scale industrial mines have long stopped using mercury because it is inefficient.

Both Peru and Colombia have signed the U.N. Minamata Convention, which is intended to phase out the use of mercury in traditional gold mining by the end of the year.

Telmer said the government could also help by abandoning ineffective drug-war tactics that include airborne rainforest raids.

“They blow up some [illegal] dredges this week and then next week the dredges are back in there,” Telmer said.

110GoldCol00 NEW PPP

An alternative is to provide resources to artisans.

One organization doing that is the Global Environmental Facility, which is funded by the United Nations, development banks and international non-governmental organizations. The group is providing $45 million in financing to help artisanal gold miners eliminate the use of mercury in Peru, Colombia and six other countries.

“The only way to fix this problem is to bring [small miners] into the formal sector,” Telmer said, “and that includes formal financing.”

Drug trade

Even as they fend off harsh tactics from South American law enforcement, artisanal miners are vulnerable to extortion and outright takeover by drug cartels, who see the gold trade as a way to launder drug profits. In effect, the miners are squeezed between the government and the cartels.

This is where U.S. law enforcement can play a critical role — by aggressively attacking the cartels’ use of gold to launder drug profits, according to Lou Bock, , a retired agent with the Department of Homeland Security.

For decades, however, the United States has taken a haphazard approach to regulating the gold market.

Criminals manipulating gold knew no one was “looking at them,” Bock said.

Consider the Financial Crimes Enforcement Network, a U.S. Treasury Department agency responsible for enforcing anti-money-laundering laws. FinCEN has imposed only one civil sanction against a U.S. precious-metals company — a $200,000 fine in 2015 against a Los Angeles dealer that failed to set up an anti-money-laundering program.

John Cassara, a retired U.S. Treasury agent who worked at FinCEN, said his bosses forbade him from going after the industry following the 9/11 attacks. Instead, top officials wanted to focus on traditional targets like money laundering through banks.

“I was literally given a gag order,” Cassara said.

A FinCEN spokesman did not respond to requests for comment.

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Colombian police battle illegal gold miners

In the Colombian rainforest, outlaw gold mines are poisoning workers and the environment. Police venture deep into the jungle to destroy them with explosives.

Jim Wyss, Edited by Matias J. Ocner

jwyss@miamiherald.com

But there are signs the U.S. government is getting more aggressive.

Last year, federal prosecutors in Miami uncovered a staggering $3.6 billion money-laundering scheme by employees of a major South Florida precious-metals company, Doral-based NTR Metals. The three NTR traders pleaded guilty to buying dirty gold from narco-traffickers and other criminals in Latin America.

“We’re now putting pressure on the money-laundering end of it,” said John Tobon, deputy special agent in charge of Homeland Security Investigations in South Florida, which worked with the FBI on the NTR case. “The criminal organizations have been able to infiltrate the [precious-metals] industry to a level we were not familiar with.”

Miner+a Ilegal en Nari+o_ Colombia by JMBB 044_01

A reflection of this shift in emphasis: Almost a year ago, the U.S. Attorney’s Office in Miami renamed its narcotics division, indicating a sharper focus on money laundering. It’s now the International Narcotics and Money Laundering Section.

Peter Quinter, a former U.S. Customs attorney now in private practice representing Miami gold dealers, said his clients are eager to assist federal authorities.

“There has definitely been increased scrutiny” since the NTR case, including more gold seizures and stricter examination of Customs forms, Quinter said.

But the fallout extends far beyond Customs searches, all the way to the banks that prop up the international precious-metals market.

“A major aspect of this racket is the banks,” said Charles Intriago, a money-laundering expert and former federal prosecutor in Miami. “Where are they when these multibillion-dollar gold transactions are conducted? The Justice Department, FBI and IRS should not leave the banks on the sidelines.”

In the meantime, Scotiabank, the Canadian lending institution that services NTR’s parent company, Elemetal, is looking to sell off its gold-lending arm, the world’s oldest, according to the Financial Times.

That is no small matter.

If the banks pull out, the U.S. gold industry would be undermined: Banks provide financing to dealers and refineries for a steady stream of shipments to the United States.

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Just as the U.S. government has awoken to the threat of money laundering in the gold industry, America’s largest companies are taking a keener interest in the source of their gold.

Elemetal supplied dozens of blue-chip companies, according to corporate disclosure forms, including Tiffany Co. and Apple. Those companies said they constantly check to make sure they aren’t using “blood gold” in their products.

Tiffany said it bought only domestic “scrap” from Elemetal, rather than mined materials from Latin America. Scrap gold is collected from pawnshops and jewelry stores in the United States.

Apple declined to comment. But a spokesman said last year the company had found “no evidence of illegal gold entering our supply chain.”

Fernandez, the tropical ecologist, said that U.S. companies should buy only gold that is certified as “fair-trade,” meaning the mining process does not damage workers or the environment.

“That could be a game-changer,” he said.

One Colombian nonprofit, the Alliance for Responsible Mining, has already created a fair-trade brand of gold it calls “Fairmined.” The group works with artisanal miners in Latin America, Asia and Africa to make sure they follow environmental and labor laws and don’t use mercury or interact with criminals.

That comes at a price, just as organic foods cost more than processed ones.

Fairmined gold is sold for a premium between $2,200 to $4,000 per kilogram above the market price. Some of that money is shared with the miners. (In January, a kilogram of standard gold cost more than $42,000.)

Despite the premium, the program is finding success: Swiss watchmaker and jeweler Chopard uses Fairmined gold. And when Colombian President Juan Manuel Santos was awarded the Nobel Peace Prize in 2016, the medal was minted from Fairmined Colombian gold.

Last year, Fairmined produced roughly 250 kilograms of gold. In 2018, the Alliance for Responsible Mining hopes to double that.

“What we need is to certify more mines to be able to supply the market,” said Yves Bertran, the group’s executive director. “It’s a slow process but we are really making progress.”

Dirty metal

Cleaning up the gold trade can’t happen without a commitment from U.S. and international refineries that buy precious metal from Latin America and sell it to jewelers, banks and electronics companies.

They need to know their suppliers aren’t criminals.

“Anybody dealing in gold legally has to trace it back to the source and confirm that it’s legitimate,” said David Bolton, a Miami private investigator who has worked for U.S. refineries and Latin American gold exporters.

There are two major sources of gold in Latin America: large mines controlled by multinational conglomerates, and gold brokers known as “aggregators” who buy from artisans.

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Aggregators offer a riskier business model, experts say, because it’s so difficult to trace the origins of their gold. Some buy gold from mines controlled by criminals — and cover it up by falsifying paperwork and bribing officials, as NTR employees did.

When dealing with aggregators, “it’s impossible to know the original source of the gold,” said Mike Riess, a precious-metals consultant who sits on a U.S. Treasury Department anti-money-laundering advisory board. “It’s more likely at this point that you’re dealing with a criminal organization.”

Despite the risks, many global gold firms seeking to meet endless demand still buy from aggregators instead of large mines. That includes two of the world’s biggest refineries, Switzerland-based Metalor and Japan-based Asahi, which both have operations in the United States.

José Ramon Camino, Metalor’s general counsel, acknowledged in an email that buying from large, regulated mines “reduces the risk.”

“However, in Colombia, the majority of the mining operations are small,” Camino said. “Business can still be done, provided that compliance is not compromised in any way.”

Camino said Metalor compliance officers visit Latin American suppliers to ensure that they have permits, pay taxes and meet regulations.

“If there are doubts that we cannot clarify, we stop the business,” he said.

Asahi declined to answer questions. But spokesman David Dorris said Asahi’s suppliers source “material in a legal and responsible manner.”

Gold companies realize vetting aggregators is no easy task, nor foolproof.

“Even though we carry out exhaustive due diligence and know-your-customer processes, there’s never any guarantee of certainty,” said Pacco Liano, compliance officer for Miami-based Kaloti Metals Logistics, which buys gold from Latin America and sells it to a refinery in Dubai.

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It’s not easy turning raw bars of gold into the pure metal that goes into American jewelry, bullion and electronics. A Miami gold company breaks down the process.

Jose A. Iglesias

jiglesias@miamiherald.com

Republic Metals, an Opa-locka-based refinery that is one of North America’s largest, once bought from aggregators, too. But no more.

The firm stopped dealing with aggregators in 2014. It now buys only from big, regulated mines in both Colombia and Peru.

CEO Jason Rubin says large mines owned by publicly traded companies are less vulnerable to criminal infiltration because of greater government scrutiny and internal resources for due diligence.

In fact, executives at Goldex, an aggregator that once supplied Republic, were charged in Colombia in a scheme to launder almost $1 billion through gold exports. The case is ongoing and Goldex denied wrongdoing.

“I don’t want to risk our reputation,” said Rubin, whose father started Republic in 1980 and grew the refinery into a massive operation, where cauldrons pour molten gold in a searing furnace straight out of Tolkien.

But dealing only with large mines cuts out subsistence miners from the global gold economy.

One startup Miami gold company that still uses aggregators believes that “fair-mined” branding can help distinguish legitimate artisanal miners from those with ties to criminals.

Alejandro Esponda, vice president of Doral-based Universal Precious Metals, said U.S. companies have a duty to support small miners who labor in remote jungle regions where mining has been practiced for centuries.

“It’s a social enterprise,” he said.

Article source: http://www.miamiherald.com/news/nation-world/world/americas/article194188459.html