Veta Sur For The Ages -- Makes Grade Again
MEDELLIN, Colombia -- Ramping up what looks like Latin America's highest-grade gold-silver mine, you can AFFORD to leave the grades OUT of the headlines.
That's the case with
Continental Gold and its hard-rock Veta Sur vein system at
Buriticá in Antioquia, Colombia.
So,
today's release: 10.85 metres @ 56.4 g/t gold and 163 g/t silver? Continental's wordsmiths put those numbers
in the body of the release. Not the headline.
Continental Gold (CNL in Canada and CGOOF in USA) has been headlining numbers like this for a long time.
Last year, the company logged something so extraordinary,
97.8 grams per metric ton with a thickness of
6.9 meters at its second golden vein system, Yaragua, and in a so-called step-out exploratory hole, 2.2 meters of 2,615 g/t gold, that
King Midas himself rose from his tomb and filed his own exploration claim adjacent to Continental's 62,000 hectares of property.
How's that for the law of
Medes and Persians? (Look it up,
TCR family.)
G
rupo de Bullet, Robert W. Allen's minerals syndicator, started developing the vast property in coffee-growing country in 2007. And stuck with it. Mr. Allen and his Bullet Group are looking to take another Antioquia property, high-grade veined systems, with mining equipment, public via a reverse-takeover transaction:
Red Hut Metals of Canada.
(That one, called
Otu, is next to Segovia and Remedios and is considered the richest historic gold area of Colombia, and yes, I have seen Mr. Allen's long-held properties there. About 100,000 hectares in northeast Colombia, including 65,000 hectares of registered contracts with processing plant and granted permits. Mr. Allen and his Otu team say they have none of the bandito and
polvo loco problems that can make life exciting and short in parts of Antioquia. Disclosure: Mr. Allen and family are family friends.)
Buritica's two flagship vein systems have respectable, nay, superior widths and grade accumulation (grade x thickness) for these veins, which I have seen three times.
Most every metric that goes into the building of what will be Colombia's newest hard-rock (underground) gold mine is superior. Even esoteric mining and economic terms such as grade variance, mine life (18 years currently), mine payback, extended vertical reach of minerals and so on.
You know what's coming here, don't you? Stock price when those Midas grades were published in June 2014: $3.30 CAD or something. Stock price now: near an all-time low at $1.50.
Holy King Midas. Something has to change here.
Let me not, as
King Midas might have addressed his citizens, let me not lay out Continental's 2014 economics report (called a PEA in the biz).
At this point, anyone who wants PEA gets PEA: 18-year mine life based on 20 million tons grading 7.8 g/t gold and 19.35 g/t silver. Result: 4.7 million ounces of recovered gold and 7 million ounces of recovered silver.
Mosaic In Colombian Village, Courtesy of Azulina Ceramics
I wrote this in 2011, for petes-sake:
·
Continental Gold VP of Exploration Stuart Moller deserves recognition for his commitment to Colombia's Buriticá, which I believe one day will rank among the world's richest gold-silver veined deposits. Continental Gold's (TSX: T.CNL, Stock Forum) deep-drilling program of 1,000-plus meters is reaching lustrous gold veins at its Veta Sur target. 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.
TCR audience, I know you expect a takeaway here. I believe, and I have put this in front of CEO
Ari Sussman in Toronto and his revolving chain of command at
Continental Gold, several times. It sounds bizarre, but this is Colombia (and no I am not there right now, I am preparing for Cambodia departure).
Yep, Colombia. My hope of hopes for gold, copper and silver in 2007 is
King Midas's nightmare. All that gold, all those international investors who are shaking their heads at the way Colombia's current, second-term president, is managing his promising nation's economy. Colombia's governmental infrastructure at every level: national, regional and sometimes, local, is a bureaucracy right out of your worst (or best) dystopian Young Adult novel.
In addition, and this is where it sounds bizarre: Continental's size in terms of land -- 62,000 hectares -- is hurting its chances. That's because illegal miners with
polvo loco blasting powder are blanketing pockets of the property in death, separated limbs, blood, extortion, mercury poisonings and so on.
Continental has a treasury right now -- its cash -- that King Midas would envy. (Market cap: approx. $260 million; enterprise value: $175) That's to help get
Buritica built. CNL also has other Bullet properties, such as promising Berlin, also in Colombia.
But the law of this king is constant;
he wants the gold. So do investors, who also want the silver. Without the tangle of President Juan Manuel Santos's sticky and stuck-up web of total incompetence.
I don't know what to say, but I am considering, after all these years, buying the shares at their current king-less depths. Helping right now: Colombia's hammered peso vs. USD and CAD makes CNL's expenses go
down on financial statements.
When gold and silver's price boosters return, these $1.50 CAD shares will double in the heartbeat of a dead king.
TCR confidential: More actionables Friday. True North Gems looks ready for a breakout. Carisle Gold shares holding up after reverse-split (consolidation) transaction.
Azarga Uranium's fresh PEA (economic report) bodes well for its Dewey Burdock project in the western USA, and shares are 25 percent cheaper than what the professional backers paid for 'em.
-- Thom Calandra
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Thom Calandra & TCR are researchers and investors. They are not registered investment advisers. The research and material they offer to subscribers are meant as editorial opinion.