Continental Gold Limited New CGOOF

TDW

[MrBigger]

Continental Gold Inc. (CNL-T) C$3.48 Higher Grades than Predicted from Resource
Daniel Earle Arun Lamba, CFA, (Associate)
Event This morning, Continental announced positive gold reconciliation results from approximately 600 tonnes of recently extracted trial mining test ore (see Flash Note from December 18 here) that the company batch-processed through its 30 tpd Yaragu mill located at its Buritic project (100%) in Colombia. Impact: POSITIVE The mill processed an estimated 173 oz from 594 t (9.1 gpt) versus expectations from the Resource Block Model of 109 oz from 622 t (5.4 gpt), suggesting that the grade was approximately 69% higher than expected. We note that these results are from a specific vein in the core of the Yaragua system, which itself only represents roughly half of the modelled Buritica resources, with Veta Sur accounting for the other half. The company previously indicated prior results continue to suggest that vein widths and grades tend to improve with increased sample density. This is consistent with prior channel sampling as early as 2014 and our commentary from underground observations over a period of years, but we would suggest this relates only to the core of the Yaragua and Veta Sur zones. It remains our view that Buritica stands as one of the largest and highest grade, independently owned, construction-ready gold projects in the world. We expect the stock to re-rate progressively higher as the company continues to advance the project (Exhibit 1). As at September 30, the company reported $327mm of liquidity.