FOCUS VENTURES LTD. V.FCV

Focus Ventures Changes Tack In Peru By Alastair Fo

[nicklebacksucks]

https://www.minesite.com/nc/cnd/minews/singlenews/article/focus-ventures-changes-tack-in-peru/1.html
May 05, 2010
Focus Ventures Changes Tack In Peru
By Alastair Ford
That old hackneyed adage about speculating to accumulate is all very well when the momentum is on your side, but it can be quite trying when the geological facts go against you and the speculation is all the other way. A flood of speculative money flowed into Canadian-listed Focus Ventures ahead of its recent drilling programme on the Nueva California gold project in Peru. That was all very well right up until the moment the results came in. When they did the money flowed right out again. Focus shares immediately dropped by C
.35 to C
.68 after the company released to market assays which showed that the grades at Nuevo California aren’t as consistent as would have been required for the hoped-for bulk tonnage operation, nor indeed high enough. And it was small consolation that one hole showed the thickest mineralised intercept that the company had drilled to date. All that was a couple of weeks ago, and since then the drift has continued, such that the shares are now at C
.45.
So, some heavy damage, as David Cass, the company’s president, concedes. “We were promoting a bulk tonnage disseminated target”, he says. “The market expected to see good intercepts in all the holes. But the geology is quite complex. We’ve been able to explain that now. The million ounce potential isn’t there.” That’s putting it plainly enough, although it must be added that there’s still gold at Nueva California, and it may still be worth mining. So the next step, continues David, is for Focus to work out if it’s worth continuing or not. A large bulk tonnage target is now out, but it’s just possible that a smaller operation might still be worthwhile, given that gold is pushing on towards US$1,200, and that cashflow is, after all, cashflow.
Certainly investors in London would understand if Focus chose to continue – one of the Aim market’s most successful companies in recent years, in terms of share price appreciation, has been Minera IRL, a company with a tiny, but very profitable gold mine also in Peru, and which offers longer term upside across a diverse exploration portfolio. Whether the Canadian markets would be so enthusiastic about a similar such development from Focus remains to be seen, but be that as it may, the company isn’t resting on whatever laurels it can still lay claim to.
With a decision on Nueva California still pending Focus has now shifted its attention to two other properties, the Chucara gold-silver project and the Minas Chanca silver project, both also in Peru. Chucara is the primary focus, as Minas Chanca has been optioned out to leading local miner Buenaventura. Anyone who wants to check Buenaventura’s credentials need look no further than Yanacocha, Peru’s largest and most famous gold mine, in which it owns a 43.65 per cent stake. In mining it sometimes pays to have powerful friends locally, and Focus couldn’t have chosen better here. Buenaventura will earn a 75 per cent interest in Minas Chanca in return for spending US$3 million on exploration, and the hope is that the historic silver workings will point the way to new potential. Early grab samples taken by Focus from the historic workings gave plenty of grounds for encouragement, but it’s Buenaventura’s baby now, and it’ll be interesting to watch them run with it.
That leaves Chucara, where the company is currently in the permitting stage ahead of a drill programme that it hopes will unlock considerable value. “It’s swarms of structures and veins”, says David Cass, “and the gold and silver content appears to be consistently high up and down the trend”. He can say that with some confidence, as there’s plenty of historic data derived from 1,275 channel, panel and grab samples, although none of it has yet been verified to NI43-101 standards. These showed an average of 2,170 parts per billion (ppb) gold, 95 parts per million (ppm) silver, 5,071 parts per million lead,1,599 parts per million zinc, with arsenic and antimony also contributing to the mix.
“The high grade veins may bulk up into a bulk tonnage target”, says David, although on recent experience it looks as though the markets will now wait for the drilling to put that theory to the test before buying back into Focus. But investors oughtn’t to have too long to wait. The plan is to drill 15 holes encompassing 3,000 metres of diamond drilling across as many of the mineralised structures as the company can hit. Lest there be any doubt, the company has US$4.5 million in the bank, so there’ll be no need to raise further funds to get cracking. Indeed, there’s enough headroom that David’s contemplating further acquisitions. It’ll be interesting to see if he can pull anything out of the hat, but lest anyone wonders whether price inflation may now be pushing valuations beyond a realistic level, David affirms to the contrary. The Peruvians are growing used to having a mining industry these days, he says, and their expectations aren’t unreasonable. Watch this space – for news on Chucara, and on a possible deal later in the year.