These days, it’s unusual to see a company’s share price more than double on strong trenching results. But this is what happened when Calibre Mining (TSXV: CXB; US-OTC: CXBMF) released more trenching assays from its wholly owned Montes de Oro gold-silver-copper-zinc project in northeast Nicaragua on Aug. 15, with investors pushing the stock up 163%, or 6.5¢, to close the day at 10.5¢.
The latest results include 52.3 metres grading 7.1 grams gold per tonne from trench No. 9; 23 metres of 5.25 grams gold from trench No. 17, including 10.15 grams gold over 9 metres; and 16.2 metres of 4.68 grams gold from trench No. 19, including 10.14 grams gold over 6 metres.
“There are certainly some high grades that we have in these trenches, and now we see some continuity, especially along that principal structure that holds trench nine and a number of others . . . around that trend that seem to be giving us consistently high-grade results, and as we’ve seen in trench nine, some significant widths as well,” says Greg Smith, the company’s president and CEO.
Calibre discovered the Montes de Oro target after following up on the recent regional work on its 785 sq. km Borosi concessions in Nicaragua’s mining triangle, which includes three historic gold-producing regions: Bonanza, Rosita and Siuna. Montes de Oro is within the Siuna district, 10 km north of the Calibre’s Cerro Aeropuerto gold-silver project.
Smith says the company started stream-sediment sampling late last year in the area before putting in a soil grid in first-quarter 2013. It has been testing the anomalous trench results from the soil sampling for the past five months. The Vancouver-based firm plans to keep trenching the Montes de Oro target well into the fourth quarter so that it can better understand the mineralization. So far, it has only partially tested the Montes de Oro anomaly, which spans a 400 by 650 metres, and remains open to the northeast.
Calibre says Montes’ skarn-style mineralization is comparable to Cerro Aeropuerto’s, and that of its wholly owned, past-producing La Luz mine, sitting 9 km to the south, which produced 2.3 million oz. gold from 17 million tonnes grading 4.14 grams gold. However, it notes more work needs to be done to confirm the geology before drilling starts.
“Logically — once we’re happy that we have a good idea through this trenching of the geology and the grades here on surface — the next step will certainly be doing some drilling at Montes,” Smith comments. While the company could fund its own drill program at the project with $2 million in its till, Smith says it has been talking with possible joint-venture partners over the past months.
Partnering up with other miners to advance its projects is an integral part of Calibre’s strategy to survive the cyclical nature of the business. Its joint-venture partners include B2Gold (TSX: BTO; NYSE-MKT: BTG) — Nicaragua’s largest gold producer and operator of the La Libertad and El Limon mines — and Alder Resources (TSXV: ALR). B2Gold has earned a 51% interest in Calibre’s Primavera gold-copper project, as well as on 322 sq. km of surrounding concessions, by spending $8 million. It has an option to earn another 19% in the project and nearby concessions by investing $6 million over three years.
Alder has an option to earn a 65% stake in Calibre’s Rosita D concession, which hosts the historic Santa Rita copper-gold mine, by spending $4 million over the next four years.
Calibre recently traded at 9¢. It has a $16-million market capitalization and 187.9 million shares outstanding.
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