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Investment case for several Colombia gold/silver prospectors

Thom Calandra Thom Calandra, www.thomcalandra.com
0 Comments| September 6, 2011

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Note: The investment case for several Colombia prospectors concludes this article.

BURITICA, Colombia – It's dry season in the equatorial Andes. Yet this nation of 50 million people is flooded with prospectors, mining companies and syndicators looking for fresh mineral patches.

"I've lived here six years and this is a real swarm," says 34-year-old Miller O'Prey, a geologist whose lineage includes posts as chief geo for powerhouse Continental Gold (TSX: T.CNL, Stock Forum), VP of Exploration for private stakeholder and property owner Grupo de Bullet and presently, CEO of Solvista Gold (TSX: V.SVV, Stock Forum) in Antioquia's Middle Cauca Belt.

Click to enlargeMr. O'Prey was entertaining an overflow crowd at his home, one of 50 or so events at this past week's international mining show in Medellin. The Belfast, Ireland-bred economic geologist is an anomaly in the metals-rush of Colombia. His Spanish is perfect yet laced with a faint Irish brogue and an occasional and colourful expletive.

Mr. O'Prey has never been seen drinking alcohol in this city of eternal springtime and twilight-to-dawn parties. He gets to bed early, with his young child, his wife and another child on the way. Miller jogs in the suburbs. He knows everyone in the mining business. His geo-facts have yet to be disproved. I am told he has yet to fail.

"They say 12,000 people are in town this week for the (mining) show," Mr. O'Prey tells me, as a salsa band plays before a Solvista and Calvista (sister company) party that includes at least four heavyweight investors and three in-country deal makers. "I think it has to be more; just look around."

Presto. This week, the International Colombia Mining Expo 2011 revised upward its attendance estimate to 18,000 people for the three days. The gathering for mining and related services is perhaps second in size only to Toronto's PDAC conference draw of 26,000 people in March 2010.

Young Miller O'Prey was Solvista's top choice when Consolidated Thompson Iron Mines' Jerry McCarvill approached Robert W. Allen's Grupo de Bullet some 16 months ago in a search for Colombia properties and talent. (Photo: Miller O'Prey inspecting stockwork mineralization within Guadalupe's Antioquia Batholith.)

Solvista and sister company Calvista (TSX: T.CVZ, Stock Forum) got to the Antioquia (and Bucaramanga) party just in time to jump in the pool. "Properties were starting to fly off the shelf," says David Meyer, a former Bay Street securities analyst and a managing director of parent company Norvista. "Bob (Allen) knew it was time to let Miller loose."

Turns out, hardscrabble Mr. O'Prey raised a fifth of Solvista's first $18 million earlier this year. Most of the Belfast lad's cash connections were rich Colombians. Kinross Gold (NYSE: KGC, Stock Forum) came in for just less than 10 percent in an equity placement, too.

Click to enlargeGuadalupe to the northwest of Medellin and Caramanta to the south carry 42 concessions in total for Solvista. Both are copper and gold. Guadalupe's drill targets almost surely will see burly rigs straddling steep hillsides before year's end. The area is host to several precious and base metals and contains historic and what appear to be potent gold veins across volcanic and clastic sediments.

There is talk in the town of Guadalupe that Solvista's concessions there, and those of another company, CuOro Resources and its Santa Elena property, hold copper grades as high as 2.6 percent plus the possibility of thick gold and silver veins.

Mr. Allen's Grupo de Bullet has been a familiar face in the Guadalupe area since 1996. "I figured, with the vending of our properties to Solvista, I could have no better caretaker than Miller O'Prey," says Bob Allen, who has been acquiring properties in Colombia since 1981. (Photo: Bob Allen, left, and Amit Tripathi of Sunward above the town of Titiribi – Thom Calandra photo)

I intend to purchase Solvista's Canada-traded shares in coming days, after this report is published and distributed to our Stockhouse audience. I own 3,000 shares of CuOro (TSX: V.CUA, Stock Forum), whose land package sits smack in the middle of Solvista's concessions at Guadalupe. I believe drill results from CuOro are expected this week or next.

As for other Colombia intelligence:

  • The national government is almost sure to act on a number of concessionary applications and related paperwork, including environmental, in the next three months. These include properties at Tolima and Colosa in the central Andes and involve several companies, including Anglogold Ashanti (NYSE: AU, Stock Forum), says Nicolas Lopez, outgoing secretary for the department of Antioquia's Ministry of Mines.
  • Colombia's early-stage prospectors in the stock market are faring slightly better than most jurisdictions. In the past five challenging months, only precious metals companies in West Africa and Yukon appear to be losing less of their all-time high stock prices to indiscriminate sellers. (I exempt Mexico and Peru silver producers; these seem to be mostly invulnerable to declines.)
  • Click to enlargeThat last bullet will get me 20 or 30 "but what about this?" jags. That is OK. Feel free to inform me. The Colombian stock with the most mojo this past spring and summer is Sunward Resources (TSX: V.SWD, Stock Forum). It's just 12 cents from an all-time high at a Canada market worth of $170 million. I visited Sunward's Titiribi properties last week: See reports.Here and here. Dr. Amit Tripathi is the VP of Exploration there and practices a predictive drilling model that is almost 100 percent accurate for the structural controls he and his team have identified. Dr. Tripathi proved it to me and a few select others, and I will be discussing his model soon. I think we will see a fresh NI 43-101 resource for Sunward's Chisperos and Cerro Vetas properties in coming weeks. If I have my thinking cap on straight, the Canada-compliant estimate well might exceed the figure of seven million ounces total that I hear discussed in Medellin restaurants and board rooms. (Photo: Sunward's Colin Andrew, Amit Tripathi and Georges Julliand on site at Titiribi compound – Thom Calandra photo)
  • I don't own Sunward shares; neither do I own those of Ari Sussman and Bob Allen's Continental Gold (CNL). I wish I did on both counts. Sunward's camp is a compound, having added buildings and 150,000 meters of drill core space for storage since last I saw the project. Some 58,000 meters already have been drilled at picturesque Titiribi. Still, Sunward's property almost surely will be an open pit of some kind, out of sight of most residents but still an open pit in an area of Colombia, Antioquia, which has little love for property sores on the landscape. Not that Sunward and its team, including Georges Juilland, Chief Operating Officer Dave Forest and CEO Colin Andrew, a mining engineer and geologist, take the landscape lightly. Their community relations, largely an agricultural education program for property owners across the area, appear to be sincere. In addition, Sunward's Dr. Tripathi has organized a Bollywood Indian Film Festival for the historic town of Titiribi.
  • Bet la finca: If I were one to practice ultra-conservative investing practices coupled with common sense and a crystal ball, and by the way I have none of those things, not even the common-sense part, I would after this 15th visit to Colombia bet the finca on Continental Gold. VP of Exploration Stuart Moller deserves recognition for his commitment to Buriticá, right down to his team's care of the noble mules that haul most of those big-assed securities analysts down steep grades to the property and back up again. Talk is that CNL's deep-drilling program of 1,000 and more meters is dipping into lustrous gold veins at its Veta Sur target, ones that could give those mule-bound analysts a real run for their calculators. If true, we'll be seeing fresh drill assays in coming weeks that could top the already sky-high ones (12 grams gold per tonne and higher; 60 grams silver) that were published last week and in July to the applause of investors. This is speculation on my part based on local geologists' idle (or not) chatter.
  • I expect, if such rich readings were to appear imminently at Buriticá, that we will see a full-press forward on the construction of a Continental Gold tunnel for ore shipment to a yet-to-be-built mill. The beauty of an underground operation is just that. The mess is out of sight and mostly out of mind for coffee growers and area residents. What is more, any company with what might become the world's newest high-grade gold-silver discovery (six million ounces is the number bandied about for a fresh NI 43-101 reportlooming on the filing horizon but most local geologists say 10 million and more ounces are achievable) will seek to "part out" properties that are not part of Buriticá. That is my take. "Keep it pure," in effect. In Continental's case, a stock-market spinoff would absorb the other Grupo de Bullet-vended properties in CNL's portfolio. Continental Gold at last count had $90 million or so in the till. The company's shares and operations under the stewardship of Chairman Bob Allen, CEO Ari Sussman, Stuart Moller and chief geologist MauricioCastañeda at current prices might be the annuity of a lifetime. "We tend to believe the new resource estimate that is coming has the potential to catch the attention of the market," Mr. Moller says.

NOTES: I will be touring Carlisle Goldfields' (TSX: T.CGJ, Stock Forum) northern Manitoba property at Lynn Lake in less than one week's time. ... I will be speaking and showing and telling atCambridge House's Toronto conferenceThursday Sept. 15. I will be in Toronto most of that week. … I will be speaking and eatingsuckling pig at Brien Lundin's New Orleans Investment Conferencein late October. You can click on this link to get a deep discount on the entrance fee. … I am a partner of Torrey Hills Capital, which is in Del Mar, near San Diego. That investor outreach firm lists none of the companies in this report as clients.

Stockhouse members – the service is free – can see my entire portfolio online. It is under the portfolio function and my user name, which is TCALANDRA. There is nothing in my portfolio suitable for risk-averse investors. I am not a financial adviser. Owning any of these securities could result in your participation in the crying game. Please see my comments on Stockhouse about the benefits of holding securities and physical metals for long spans of time.

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