VANCOUVER — Since hitting 333 metres of copper-gold porphyry in its first hole at the North ROK property in B.C. just four months ago, Colorado Resources (TSXV: CXO) has completed 6,000 metres of drilling and hit mineralization in 10 of 12 holes, which together returned 1,800 metres of mineralization with an average grade of 0.3% copper and 0.37 gram gold per tonne.
Colorado has tracked mineralization along 500 metres of strike and the latest hole, collared 400 metres away from the discovery hole, ended in mineralization after cutting 402 metres of copper-gold core.
Apparently the market expects more. Colorado’s share price fell 38% on the news, dropping from 71¢ to 43¢.
“I’m extremely pleased with the progress our technical team has made, but it is tougher these days when the market is telling you otherwise,” says Adam Travis, Colorado’s president and CEO.
North ROK is in northwest B.C., near the town of Dease Lake. The property straddles Highway 37 and is 15 km from Imperial Metals’ (TSX: III) under-construction Red Chris mine.
Red Chris hosts a large copper-gold porphyry deposit, which is what Colorado is hoping it has at North ROK. Travis and his team have a lot of porphyry experience. Several are also familiar with Red Chris, having worked at or studied the deposit.
“With the combination of youthful enthusiasm, experience at Red Chris and some old dogs like me — we know what these things look like,” Travis says.
That knowledge, along with geophysical data, has shaped Colorado’s exploration program at North ROK. The property hosts a chargeability anomaly that measures 1.5 by 2 km. Within that chargeability anomaly sits a 1,200-metre-long magnetic feature.
“In these porphyry systems we know there’s usually a linkage up with magnetite,” Travis says. “So it’s a good place to be, having both the magnetic anomaly and the induced-polarization anomaly.”
Colorado collared its first North ROK hole in the middle of the coincident anomalies, which produced the initial 333-metre intercept grading 0.51% copper and 0.67 gram gold per tonne. Since then the company has been stepping out 100 metres with each new drilling platform.
“The purpose of this program was really to demonstrate that we could step out in sizable intervals,” Travis says. “With a porphyry system what really matters is size, so less experienced juniors may have chosen to twin or pincushion all around hole 1. That could have gotten us some flashy numbers, but at the end of the day they wouldn’t really have meant anything. You have to build tonnes on these systems, so that’s what we did.”
Most of the 100-metre stepouts hit into mineralization, as outlined in the latest set of results. Hole 5, 1,200 metres southeast of hole 1, returned 120 metres grading 0.22% copper and 0.34 gram gold from 115 metres downhole, including 42 metres of 0.38% copper and 0.62 gram gold. One hundred metres southeast of that, hole 7 cut 127 metres averaging 0.18% copper and 0.36 gram gold.
Farther southeast along strike, hole 8 returned 189 metres of 0.27% copper and 0.14 gram gold. Hole 13, sitting 400 metres southeast of the discovery hole, returned 402 metres of 0.28% copper and 0.27 gram gold, starting 162 metres downhole and including 161 metres of 0.41% copper and 0.28 gram gold.
Drills will keep turning at North ROK, as Colorado just received approval to drill another 40 holes.
And the company has the funds to do so, having raised $4 million in a flow-through financing that saw Colorado sell 5 million flow-through shares for 80¢ apiece. Travis says they are halfway through that money. The company also has $7.9 million in the bank.
The day after its latest news sparked the 38% slide, Colorado shares rebounded slightly, gaining 1.5¢ to close at 44.5¢, but have since drifted to 41¢. There are 45 million shares outstanding.
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