It's been a tumultuous six months for Colombia-focused explorer CB Gold (TSX: CBJ; US-OTC: CBHDF) and its Vetas gold project 325 km due northeast of Bogotá. The company saw former president and director Giles Baynham depart in late December, while its remaining officers and directors accepted temporary reductions in salaries and fees in order to preserve cash resources.
Despite the tough financial conditions CB Gold continued to churn out promising drill intercepts from three targets at Vetas — namely the Real Mineral sheeted-vein zone, the El Dorado vein system, and the San Bartolo vein system — and on April 4 the company released an initial resource for the project.
Since kick-starting exploration at Vetas back in late 2010, CB Gold has punched around 71,000 metres at the project, which is built on a series of small, historic mines and exploration properties. The district previously hosted at least eleven artisanal-underground operations.
Though CB Gold's maiden resource is based on 161 drill holes the ounces contained across Real Mineral, El Dorado, and San Bartolo remain quite small. The project hosts total indicated resources of 1.2 million tonnes grading 3.25 grams gold per tonne and 3.2 grams silver per tonne for 123,000 oz. contained gold and 121,000 oz. contained silver. Inferred resources tack on roughly 2.6 million tonnes grading 3.4 grams gold and 11.49 grams silver for 289,000 oz. gold and 969,000 oz. silver.
The estimate and resource model define two deposit styles. Near-surface stock-work and sheeted vein mineralization accounts for around 1 million indicated tonnes averaging 3.2 grams gold and 2.6 grams silver for 108,000 oz. contained gold and 88,000 oz. contained silver. Meanwhile, mineralization hosted in narrow, fault-fill veins accounts for roughly 1.7 million inferred tonnes grading 4.42 grams gold and 17 grams silver for 239,000 oz. contained gold and 920,000 oz. contained silver.
The company notes that steep topography at Vetas should allow easier access to ounces at shallower depths — which account for around 70% o the total resource — while also pointing to relatively simple metallurgy that could make a potential operation more cost efficient. CB Gold started a second round of metallurgical tests in early March, with previous recoveries pegged at 94% for traditional gravity concentration and cyanide leach.
Perhaps more importantly, the company points out that due to the "high relief" at Vetas' site its surface drilling has been been quite widely spaced, which has resulted in "significant gaps" in coverage that could yield more ounces.
CB Gold estimates further exploration at El Dorado and San Bartolo could add 2 million to 3 million tonnes grading between 2.7 grams gold and 5.5 grams gold, which could tack on up to 500,000 oz. Meanwhile, targets at Real Mineral's near-surface stock-work veins are estimated to host an additional 4.5 million to 8 million tonnes grading from 0.35 gram gold to 0.5 gram gold.
"The grade estimate model has shown several areas where drilling can be focused to significantly increase the resource," noted president and CEO Fabio Capponi in the release. "We plan to aggressively target these areas with future drilling, in conjunction with initiating development studies to support a preliminary economic assessment (PEA) of the project."
CB Gold pumped nearly US$28 million into exploration at Vetas in 2013, and finished up the year with roughly US$3 million in cash and equivalents. Markets weren't particularly impressed with Vetas' maiden resource, as the company's shares dropped around 16% to 13.5¢ following the announcement before CB Gold was unexpectedly halted during mid-day trading at the company's request.
CB Gold has traded within a 52-week window of 9¢ and 57¢, and maintains 159 million shares outstanding for a $21.5 million market capitalization. Shares of CB Gold remained halted at the time of writing.
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