It has been a reasonably good run for resources companies as improving world economies have infused some buying interest. While companies have taken numerous steps to expand their resource estimates, only those with sound investment cases have been successful in securing finances to fund their expansion endeavours. The recent success by Canadian Venture-listed Colombian Mines Corporation (TSX: V.CMJ, Stock Forum) in closing a $3.89 million private placement should therefore be viewed in a positive light.
The private placement entails 4,100,000 units at a price of 95 cents per unit for gross proceeds of $3,895,000 with each unit consisting one common share and one non-transferable common share purchase warrant to purchase another share for $1.20 for two years. CMJ intends to utilize the proceeds to finance its exploration activities in Colombia, including work on Yarumalito, El Dovio, other licenses, and for general working capital purposes.
Brisk exploration activity is expected at the Yarumalito project. The company is in the process of mobilizing a second drill to the project and will be deployed in the La Escuela gold target area. The first core rig has already begun drilling early last month and has completed two holes to date at La Escuela. The company is permitting five additional drill sites in the La Escuela and Balastreras gold porphyry target zones, and has begun rehabilitation of the Mina Yarumalito mine workings in preparation for an underground drilling program.
For readers who may be less familiar with CMJ, the Yarumalito property hosts intermediate sulfidation type gold – copper porphyry system located in the Marmato mining district, Colombia, with significant potential to host large bulk mineable gold deposits.
Three distinct types of mineralization have been identified on the property and include large gold – copper porphyry type mineralization. The property consists of exploration and production licenses and contracts covering 1,425 hectares. CMJ has a purchase option agreement with the owners to acquire a 100% interest in the Yarumalito Property.
Exploration and development activities are currently underway at CMJ’s other projects as well. At the El Dovio Project CMJ has contracted McClelland Labs of Reno, Nevada to conduct preliminary metallurgical tests to determine the amenability of the El Dovio massive sulfide (gold-copper-zinc-lead-silver) mineralization to conventional extraction techniques. At the NUS Project, the company has completed a property wide soil geochemical survey and surface rock sampling program targeting gold porphyry style mineralization similar to the nearby Gramalote deposit. During reconnaissance exploration several historic artisanal adits were located and sampled.
Meanwhile, at the Venecia Project, CMJ has mobilised geochemical sampling crews to conduct soil geochemical sampling. Venecia is situated approximately 30 kilometres north of Yarumalito along the Cauca - Romeral trend, and lies adjacent to the La Mina gold porphyry and approximately 10 kilometres north of the more than2 million ounce Quebradona gold porphyry. In addition to these projects, CMJ has Cerro de Cobre, Anorí – Porce and Rionegro projects, all in Colombia.
We cover a number of mining and oil & gas companies with projects in Colombia and are familiar with its mining environment. Unlike many other Latin American and African countries, Colombia has always maintained an investor friendly environment, and the government encourages the participation of foreign companies in developing their mineral riches. CMJ has an interesting prospect portfolio and we will update you once we talk to the management.
About Colombian Mines Corporation
Colombian Mines Corporation is focused on the acquisition, exploration and development of high quality mineral properties in Colombia with near to intermediate term production potential. Colombia is increasingly recognized as a highly prospective, yet under-explored country with excellent discovery potential.