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DAILY NEWS Jul 15, 2014 8:09 PM - 0 comments

Calibre looks like a golden bet in Nicaragua

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2014-07-15

VANCOUVER — When it comes to discovery potential there aren’t many emerging jurisdictions as promising as Nicaragua, and junior Calibre Mining (TSXV: CXB; US-OTC: CXBMF) appears well positioned to benefit from a trio of promising regional assets in the Central American country.

The company is already involved in a joint venture with producer B2Gold (TSX: BTO; NYSE-MKT: BTG) and recently inked a second agreement with mid-tier outfit Iamgold (TSX: IMG; NYSE: IAG), but Calibre is also sitting on a third promising project that’s yielded some strong early-stage surface results.

“Calibre acquired the ground in Nicaruaga from Yamana Gold (TSX: YRI; NYSE: AUY) when it made a decision to focus on assets in South America. At the same time the company acquired it we made the joint venture agreement with B2Gold,” explains president and CEO Greg Smith during an interview. “That made the most sense since they are the most established group in the country, and they're a great group of guys who really like the geology. They've been pretty picky with these deals, so you won't see a lot of other similar agreements down there.”

B2Gold locked up a 51% interest in a 322 sq. km property package by spending US$8 million on exploration, and is working on upping its stake to 70% by spending US$6 million over the next 2.5 years.

The companies made a promising discovery at the Primavera porphyry project 8 km south of the town of Rosita, and are currently working on a second potential find at the Minnesota property 16 km due northwest. Smith points out that all of Calibre's land sits in what is known as the "mining triangle" due to historic production between the towns of Bonanza, Rosita, and Siuna.

The company has developed a three-stage approach to its discoveries, with geochemistry playing a prominent role. Smith explains that Calibre starts out with large, regional sampling programs before narrowing down targets via detailed soil grids and trenching. B2Gold now operates Minnesota, where the companies are in the midst of the trenching phase, which has returned strong results to date.

“For quite some time now the Privamvera, Minnesota, and Santo Thomas targets have really been prioritized based on the size of the geochemical and geophysical anomalies. I think everyone is familiar with the porphyry discovery at Primavera, and we're having a similar sequence of exploration events at Minnesota,” Smith adds. “The trench results have been impressive, with some good consistency in the samples that point towards a bulk tonnage target. The numbers are as good, if not better, that we saw during comparable stages at Primavera.”

On July 8 Calibre announced additional results at Minnesota that extended trenching intercepts to around 1.76 grams gold over 62 metres, with trenches continuing to expose intensely sericitized granodiorite with strong hematite staining and variable silicification. The gold mineralization in the trenches remains open to the north and south. The Minnesota target area consists of intrusive hosted veinlets within a structurally prepared area with widespread alteration.

Meanwhile, the company sealed a deal with Iamgold in early June that could see the producer earn a 70% interest in its 176 sq. km Eastern Borosi gold-silver project. Iamgold can earn an initial 51% by paying Calibre US$450,000 and spending US$5 million in exploration over three years, with a minimum US$1.5 million in the first year. The gold producer can increase its interest to 70% by paying another US$450,000 and investing an extra US$5 million in exploration over three years.

Where the B2Gold joint venture focuses on more bulk-tonnage porphyry tragets, Calibre's exploration with Iamgold will focus on low-sulphidation epithermal gold-silver deposits. Through around 9,400 metres of drilling Calibre has already outlined an initial resource at its Ricos De Oro target, which hosts around 2.2 million inferred tonnes grading 3.2 grams gold and 60 grams silver for 222,300 oz contained gold and 4.1 million oz. contained silver.

On July 14 Calibre announced it would be operating a 3,400 metre drill program at Eastern Borosi that would focus on the Guapinol target, which has been prioritized based on surface mapping, historic underground development and previous shallow drilling, as well as soil and rock geochemistry. Surface channel sample highlights at Guapinol include: 1.3 metres of 21.0 grams gold and 13.3 grams silver and 0.9 metre grading 9.6 grams gold and 108 grams silver.

“The geochemistry played a large part in our recent agreement with Iamgold. These are large, regional grids basically following the trend of the structures. You can see a bit on the surface, like blocks of quartz or artisanal workings, but by and large it’s been the geochemical work that's really defined these trends,” Smith explains. “We're looking at the same size and scale as the nearby private gold operation at Bonanza. Both deposits look to be controlled by the main regional trend, which is this northeast-southwest trend. We have great targets we're going after, including trenches or exposures along surface and some historic drilling.”

And with its joint venture partners footing the exploration bills Calibre has been able to maintain its treasury and focus on a third promising asset in the western portion of its Borosi concession, namely a wholly-owned 253 sq. km land package in the Siuna district. The company's holdings include the past-producing La Luz mine, which cranked out around 2.3 million oz gold between 1912 and 1968. Other regional targets include Cerro Aeropuerto, Montes de Oro, La Virgen, Rosquilete, Casa Blanca and El Avion.

Though Calibre sees some promise around La Luz dormant open pits — including historic drilling in the footwall — it’s the target at Motes De Oro that really has Smith excited. Back in 2013 the company released trench results from at the target that included 52 metres grading 7.07 grams gold and 0.06% copper. The company is also sitting on an inferred resource at Cerro Aeropuerto totalling 6 million tonnes averaging 3.6 grams gold and 16.2 grams silver for 707,000 oz. contained gold and 3.1 million oz. contained silver.

“You have these historic mines that haven't had exploration since the 1960s after operating for around one hundred years,” Smith continues. “In Siuna we're looking predominantly at structurally-controlled skarn deposits so they aren't simple ‘intrusives butting up against a limestone’ kind of skarn, they're actually within this sequence of largely volcanic rocks. That's the same package we followed to the north through the targets we generated regionally, including Montes De Oro.”

Smith says he would love to get the drills turning at Montes De Oro since the market really responds to new discoveries, but the company will wait on results from its joint venture partners to see how the news drives its stock. Calibre is currently sitting on around US$1 million in its treasury, and has been managing its burn rate to assure it’s in Nicaragua for the long haul. B2Gold also holds a number of 5¢ warrants expiring in early August that could provide the company with additional capital.

“Montes D'Oro really looks to potentially provide that bang for your buck because the market tends to like these discoveries. Again we're narrowing it down with soils and trenching, and we seem to be dealing with two sub-parallel, high-grade structures within a broader anomaly,” he adds.

Calibre has traded within a 52-week window of 3¢ and 14¢, and closed at 7¢ on 167,000 share trade volumes at the time of writing. The company maintains 188 million shares outstanding for a $13.2 million press time market capitalization. Smith says Calibre has definitely "attracted attention" to Nicaragua since teaming up with Iamgold and B2Gold, and that the wholly-owned ground in Siuna is now garnering interest from other potential partners.



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Properties in This Story

Eastern Borosi Project



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