Montreal-based explorer Colt Resources (GTP-V) tumbled to a new 52-week low after announcing it received two experimental mining licenses allowing it to advance its tungsten and gold exploration projects in Portugal, likely not the reaction the company was anticipating.
The stock dropped nearly 16% to close Feb. 20 at a year low of 32.5¢. The next day its shares rebounded, gaining 17% to end at 38¢.
Government officials granted the junior a 45-sq.-km experimental mining licence or EML for its Tabuaço tungsten project located some 300 km north-northeast from the country’s capital Lisbon and 100 km east-southeast of Porto.
The advanced-stage tungsten project sits near the city of Vila Real in Colt’s 100%-owned 218-sq.-km Armamar-Meda exploration concession, which partially surrounds its Penedono and Moimenta-Almendra concessions.
The EML covers the Tabuaço skarn-type tungsten deposits, including the Sao Pedro Aguias (SPA) and Aveleira tungsten resource areas, exploration targets on the SPA-Aveleira Gap, the Quinta-Tavora zone, and the East bank of the Tavora River.
The licence came after Colt spent nearly six years exploring the property, after staking it directly from the Portuguese government in December 2007.
Since then the junior — with big ambitions of bringing the country’s next gold and tungsten mines on stream in the next two to three years — carried out extensive outcrop sampling work followed by a diamond drilling program. To date, it has punched more than 100 holes or 11,400 metres at Tabuaço to help delineate a NI 43-101 mineral resource.
The most recent estimate, published last October, show the SPA and Aveleira deposits host 1.49 million tonnes grading 0.55% tungsten trioxide (WO3) in indicated, with another 1.23 million tonnes of 0.59% WO3 in inferred, using a 0.3% cutoff grade.
While the Montreal-based entity aims to keep exploring the tungsten property, its experimental mining program will focus on the SPA deposit, where it will excavate an access adit and a vertical shaft to test the proposed mining method, evaluate the rock mechanical conditions, and recover a bulk sample to complete pilot ore concentration work.
Earlier this year, Colt provided a small representative drill core sample to a Chinese metallurgical services provider to test recoveries. It reported flotation followed by acid leaching returned overall tungsten recoveries of 87%, as well as a final concentrate grading around 70% WO3 from an ore sample containing 0.64% WO3.
“These final metallurgical test results further demonstrate the potential to develop a successful tungsten mining operation at Tabuaço,” Nikolas Perrault, the company’s CEO, stated in a Jan. 30 release.
Colt intends to wrap up a preliminary economic assessment on the project by July, Perrault said, adding it is actively pursuing a joint-venture partner for Tabuaço so it could concentrate on its gold projects.
While Colt’s prized asset is its permitted 47-sq.-km Boa Fé-Montemor gold project — surrounded by the much larger Montemor concession in Portugal’s southern Alentejo region, with production slated to start in late 2015 — the company also owns the Penedono gold concession, which was its initial focus in Portugal after going public in 2007.
Recently, Colt and its joint-venture partner, Contécnica, received a 35-sq.-km EML for the Santo Antonio area at Penedono. The privately owned Brazilian firm agreed last September that once the licence was granted it would pay Colt €50,000 and spend at least €2 million over three years to earn a 51% interest in the gold project.
Since acquiring Penedono, Colt completed most of its exploration work on the Santo Antonia area, where mining dates back to Roman times and more recently to the 1950s, where 11,000 oz. gold from 105,000 tons of ore were recovered from a small underground mine.
Given the Santo Antonio mill never reached “an acceptable level of gold recovery” some 100,000 cubic metres of tailings material still exist at the past-producing mine, Colt says, noting the material could contain gold that could be recovered through modern techniques.
While the Penedono concession is mainly known to host several gold vein deposits, some small-scale artisanal tungsten mining also took place in the area in the mid-1900s.
Now with the Santo Antonio EML in hand, Colt and its partner are set to carry out the following: trial open-pit mining at the Turgueira deposit; process gold from the Santo Antonia tailings; sink a new adit to access and dewater the Santo Antonio underground workings and recover blasted ore left in the old galleries for pilot metallurgical testwork.
Meanwhile, the junior also obtained two exploration licences: one for the Borba copper-gold project, which covers 636 sq. km, and the other for the Cercal gold target, spanning 455 sq. km. Both prospects are located in southern Portugal.
In other news, Colt closed two portions of its previously announced $8.8-million private placement, where shares were priced at 45¢. It plans to conclude the final portion soon at the same share price. The proceeds will mainly go towards advancing the Boa Fé-Montemor gold project and for general corporate purposes.
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