VANCOUVER — In early 2012 the northwest corner of the Dominican Republic was one of the hottest gold plays in the world.
The area play alighted in May 2012, after GoldQuest Mining (TSXV: GQC; US-OTC: GDQMF) hit 231 metres grading 2.42 grams gold per tonne and 0.44% copper at its Las Tres Palmas project.
That news hit just as Precipitate Gold (TSXV: PRG; US-OTC: PREIF) was negotiating a deal for the property next door. That deal closed in September, giving Precipitate 100% ownership of the Juan de Herrera property for $450,000 in staged payments, 3 million shares, and a $1-million work commitment.
“It was a fantastic opportunity — a great area play on the biggest story in the market at the time — and the team realized, ‘OK, now we have to go through the permitting process,’” says Jeffrey Wilson, president and CEO of Precipitate. “They thought the process would take six, maybe eight months.”
Eighteen months later, Precipitate finally has an exploration permit in hand.
The company did some work in the interim, including mapping, soil sampling and grab sampling. These efforts outlined two target areas at Juan de Herrera, known as Ginger Ridge and Melchor.
Ginger Ridge was the more enticing target, and a second round of soil and rock-chip sampling there returned a best result of 13 metres grading 1.48 grams gold and 20.38 grams silver per tonne from continuous rock-chip samples. That came from within a gold-in-soil anomaly measuring 1 km long by 400 metres wide.
“That was a year ago that we finished the sampling and were ready to go in with an induced-polarization (IP) survey,” Wilson says. “And we’ve just been waiting since then.”
Wilson says several factors fed into the delay. One was that the Dominican is establishing a Ministry of Mines, instead of regulating mining through a department within the Ministry of Industry and Commerce. According to Wilson, this has sapped the motivation of regulators, who expect their jobs will be transferred to someone else.
But Wilson says the system also incorporates delays in order to weed out speculators.
“When I went to meet with the director responsible for mining in the Dominican last month, I understood a lot of what he’s concerned about,” Wilson says. “He doesn’t want opportunistic people coming down here and staking ground, and then not doing anything with it. I appreciate that, but I also told him the delay has created missed opportunities in terms of investment dollars. We do want to come down here and hire people and spend money, but until we can do some basic work, I can’t tell you that we’re going to be exploring here for a year, or for ten years.”
With a permit finally in hand, Precipitate is sourcing quotes for geophysical contracts and planning an IP program.
“Geophysical work is what led to Goldquest’s discovery,” Wilson says. “My hope is that we can outline a similar anomaly. I’ve given up on hoping that things will move the share price, but it’s a question of: Are we fundamentally on the right track towards potentially making a discovery? And I think if we do these next two phases of work — IP and then drilling — that we could be.”
Precipitate has just over $1 million in the bank as of September — or enough to fund the IP survey. More work would require new funding, but if some prospective IP results can help the company’s share price regain its former glory, a raise would be reasonable. In second-half 2012 — when Precipitate closed its deal for Juan de Herrera and Goldquest was drilling away at Las Tres Palmas — shares were worth 40¢, but now trade at 11¢. The company has 29 million shares outstanding.
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