VANCOUVER — It’s been a tumultuous six months for Colombia-focused explorer CB Gold (TSXV: CBJ; US-OTC: CBHDF) and its Vetas gold project, 325 km northeast of Bogota. 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.
Despite the tough financial conditions, CB Gold churned out promising drill intercepts from three targets at Vetas — 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 kicking off exploration at Vetas in late 2010, CB Gold has drilled 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 11 artisanal underground operations.
Though CB Gold’s new resource is based on 161 drill holes, the ounces contained across Real Mineral, El Dorado and San Bartolo are 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 contained oz. gold and 121,000 contained oz. silver. Inferred resources tack on 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 stockwork and sheeted-vein mineralization accounts for 1 million indicated tonnes averaging 3.2 grams gold and 2.6 grams silver for 108,000 contained oz. gold and 88,000 contained oz. silver. Meanwhile, mineralization hosted in narrow, fault-fill veins accounts for 1.7 million inferred tonnes grading 4.42 grams gold and 17 grams silver for 239,000 contained oz. gold and 920,000 oz. contained silver.
The company posits that the steep topography at Vetas should allow easier access to ounces at shallower depths — which account for 70% of the total resource — while pointing to relatively simple metallurgy that could make an 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 significantly, the company points out that due to the “high relief” at Vetas’ site, its surface drilling has been widely spaced, which has resulted in “significant gaps” in coverage that could yield more ounces.
CB Gold says more 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 stockwork veins are estimated to host another 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,” president and CEO Fabio Capponi noted 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 of the project.”
CB Gold pumped nearly US$28 million into exploration at Vetas in 2013, and finished up the year with US$3 million in cash and equivalents.
On April 2 the company received clarification from Colombia’s Ministry of Environment regarding concession boundaries under the delimitation of paramo ecosystem in the Santander region. In October CB Gold responded to an article in the Colombian newspaper La Republica, which indicated a potential negative impact on mining titles in the area.
The company said that its La Triada de Oro, San Bartolo, Los Delirios, San Alfonso, Arias, Santa Isabel and La Peter properties are not impacted by the paramo boundaries. It adds that the Real Minera and El Dorado properties were impacted by the boundaries in a “minor manner,” though CB Gold does not foresee any impact on its ability to develop Vetas. The company’s San Antonio property is the only asset affected by the boundaries to a “significant extent,” but CB Gold points out it does not contain any of the reported resource.
Shares of CB Gold were halted during midday trading on April 2 pending the release of the Colombian government’s Paramo update. The company resumed trading on April 3 and fell 26% on 2.6 million shares traded, en route to a 10¢ close at press time. CB Gold has traded within a 52-week window of 8¢ and 57¢, and has 159 million shares outstanding for a $16-million market capitalization.
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