A raft of gold discoveries has put the spotlight on the “Middle Cauca Belt” in west central Columbia, attracting the attention of major mining sector players, including Anglo Gold Ashanti Ltd. (NYSE: AU, Stock Forum), Teck Resources Ltd. (TSX: T.TCK.A, Stock Forum) (TCK: T.TCK.B, Stock Forum), and Iamgold Ltd. (TSX: T.IMG, Stock Forum) (NYSE: IAG, Stock Forum), and Kinross Gold Corp. (TSX: T.K, Stock Forum) (NYSE: KGC, Stock Forum).
“This is one of the fastest growing gold belts in the world right now,’’ said Hans Rasmussen, President and Chief Executive Officer of Colombia Crest Gold Corp. (TSX: V.CLB, Stock Forum) which is exploring on two properties in the Middle Cauca Belt.
It is estimated that in the past five years, the north-south trending belt has been the venue for resource discoveries that are thought to host 47 million ounces gold. These discoveries have been reported by a handful of companies, including Anglo Gold Ashanti, Colombia Crest Gold Corp., Sunward Resources Ltd. (TSX: V.SWD, Stock Forum), Batero Gold Corp. (TSX: V.BAT, Stock Forum), B2 Gold Corp. (TSX: T.BTO, Stock Forum), Seafield Resources Ltd. (TSX: V.SFF, Stock Forum), Bellhaven Copper & GoldInc. (TSX: V.BHV, Stock Forum), and Solvista Gold Corp. (TSX: V.SVV, Stock Forum).
It is why Colombia Crest has picked up 34,000 hectares in the area after changing its name from Eaglecrest in February 2011, and switching its focus from Bolivia to grass roots exploration in Colombia.
“Our business is to find something and sell it,’’ said Rasmussen.
An Oregon geophysicist, who has previously worked in Nevada with Newmont Mining Ltd. (NYSE: NEM, Stock Forum), and in Argentina as country manager with Rio Tinto Plc’s (NYSE: RIO, Stock Forum) Kennecott division, Rasmussen came to Colombia in search of porphyry deposits, which may be amenable to via large-scale bulk mining methods.
In keeping with that plan, the junior is drilling on two adjacent properties – Fredonia and Venecia.
Colombia Crest can earn a 75% interest in the Venecia property under agreements with Colombian Mines Corp. (TSX: V.CMJ, Stock Forum). It is exploring Fredonia under a similar arrangement with Grupo de Bullet, a company which has been active in Colombia for over 20 years, amassing properties in a number of exploration regions.
That portfolio included the La Colosa concessions at the southern end of the Cauca Belt, which it sold to AngloGold Ashanti. La Colosa is estimated to contain 24.15 million ounces of gold, according to AngloGold latest financial results.
Colombia Crest is backed by its biggest shareholder IamGold, which has a 14% stake in the junior and the right to raise its interest to 19.9%, after subscribing for a private placement of 12 million units priced at 28.5 cents per unit.
Thanks to IamGold, Rasmussen said his company has about $4 million available for drilling this year. That doesn’t include an additional $2 million that IamGold can make available by exercising the warrants it acquired in a private placement of 12 million units priced at 28.5 cents per unit.
Under the terms of the placement, each unit is comprised of one common share and one-half warrant. One full warrant can be exchanged for an additional share at 35 cents per share until October 31, 2013.
“We have money for 10,000 metres. But I want to crank it up because we have size potential and I want to know what the grade is," Rasmussen said.
Last month, the company said new soil samples indicate that the company has discovered four large porphyry gold-copper targets in an area known as Arabia, which straddles the Venecia and Fredonia properties. The company said the soil samples are consistent with other porphyry discoveries in the Andes Mountains of South America and are strongly correlated with copper, molybdenum and tellurium.
The Arabia area is 10 kilometres west of Bellhaven’s La Mina project and 15 kilometres south of Sunward’s Titiribi project.
Colombia Crest is currently completing a 5,000-metre drill program to probe priority target areas known as Arabia 1 and 2.
“We are only on the third drill hole,’’ said Rasmussen who hopes to be in a position to release the first results, either later this month, or in July.
While attending a resource conference in Vancouver last week, Rasmussen said the company is achieving its business objectives. However, as a result of the recent selloff in the mineral sector, exploration juniors like Colombia Crest are not being rewarded for releasing drill results. Rather, they are being penalized, he said.
Trading at 20 cents this week, Colombia has a market cap of $17.1 million, based on $85.6 million shares outstanding. The 52-week range is 39.5 cents and 16 cents.
As a result, Colombia Crest is in no rush to get drill results out to the market, Rasmussen said. “Shareholders want to see drill results right away. I say why? They don’t understand the market.”
Thom Calandra, a resource writer with California-based Torrey Hills Capital and its Baby Bulls website, said investors can play it safe by taking positions in a group of Cauca Belt companies, including Colombia Crest, Bellhaven, Sunward and Solvista. “I have been to all of these companies projects and I own Bellhaven, Solvista and Sunward,’’ he said in an email note to Stockhouse.