-- Posted Wednesday, 13 July 2011 | | Disqus
(TSX-V: BAT)
The Emerging Mid-Cauca Porphyry Belt
By: Simon Russell, Mining Analyst – GoldSeek.com
Overview:
Batero Gold Corporation’s [TSX-V.BAT, BELDF.PK] Quinchia exploration project is located in Colombia’s booming Mid-Cauca River Valley, which is experiencing one of the biggest gold rushes in the world today. This region has a two thousand year-old history of artisanal gold mining and metal working that pre-dates the Spanish Colonial era. More recently, geologists have found a number of gold-rich porphyry deposits here by using modern exploration techniques to prospect the rocks surrounding many artisanal mines. Considering Colombia’s business environment has also improved significantly, these new discoveries imply the Mid-Cauca mineral belt has potential to emerge as a modern world-class gold and copper mining area in the near future.
The primary objective of Batero’s ongoing 2011 drill program is to expand the area of known mineralization surrounding discovery holes AngloGold Ashanti drilled at the La Cumbre and Dos Quebradas porphyry targets in 2006 and 2007. Several other prospects are also being explored for additional drill targets. Soon after Phase 1 ramped up to full speed with 4 rigs drilling the 16,000 metre program I visited Batero’s Quinchia project to meet their people and look at their rocks. Most of the assay results from these holes have just been announced, showing they have recovered more long intercepts with significant gold and copper mineralization:
Hole QAP-DDH-008: 519.7 metres grading 0.80 g/t gold and 0.14% copper, beginning 6 metres below surface and ending in mineralization (-60 deg.)
Hole QAP-DDH-013: 592.5 metres grading 0.45 g/t gold and 0.12% copper, beginning 10 metres below surface and ending in mineralization (vertical)
Because the results have been very encouraging so far, after Phase 1 was completed in April they added 3 more rigs with an additional 24,000 metre Phase 2 follow up program. Led by an accomplished management team, with 7 drill rigs turning and an 8th arriving soon, plus 23 geologists and over 250 locals helping sample the rocks, Quinchia has become the most active gold-copper porphyry exploration project in Colombia today.
Batero Gold Corporation is fully capitalized for this exploration project and subsequent calculation of their property’s first NI 43-101 compliant resource estimate, which they anticipate being complete Q4 of this year. BAT has about $10 Million in cash plus an additional $28 Million of warrants and options that are in the money. Their 1,400 hectare Quinchia project is 100% owned with no outstanding payments or royalties.
The company also has an excellent share structure with only about 48 Million Shares Issued and Outstanding and 60 Million Shares Fully Diluted. BAT shares are currently trading near $2.75 on the TSX-Venture Exchange so the company has a Market Cap of about $132 Million.
We believe that Batero Gold is currently on sale relative to their geologic potential and management’s talent, so members of the GoldSeek.com staff and I have been acquiring additional BAT stock during this dip in share price.
Quinchia’s Location & Geology:
Batero Gold’s Quinchia project is located in the mountains overlooking the lush Mid-Cauca River Valley within Colombia’s “Coffee Triangle” region between Pereira and Medellin, and about 190 km from the Colombian capital, Bogota. The Cauca River is contiguous with the southern claim boundary, plus the Pan American Highway crosses part of their claim block and a railroad is nearby. Moreover, a network of dirt roads and power lines traverse this project. The Matecana International airport is located 55 km away at Pereira, capital of the Department of Risaralda with a population of about 575,000.
Quinchia is located about 100 km north of AngloGold Ashanti’s [NYSE.AU] 12.9 Million oz La Colosa porphyry deposit, which Batero’s senior geologists previously discovered and developed for the major mining company. Quinchia is also located just 20 km south of the 9.8 Million oz Marmato porphyry gold deposit and famous artisan mining district that is being developed by Medoro Resources [TSX.MRS], who is merging with Gran Colombia Gold [TSX.GCM]. Batero’s neighbor Seafield Resources [TSX-V.SFF] has 0.77 Million oz at their Miraflores hydrothermal breccia pipe and historic artisan mine. And nearby Sunward Resources [TSX-V.SWD] has a 3.7 Million oz resource at the Cerro Vetas Zone within their Titribi porphyry district. These deposits total over 27 Million ounces of gold that has been found along this emerging Mid-Cauca trend within the past 10 years, within NI 43-101 compliant resource estimates.
(Map courtesy of www.baterogold.com)
At Batero’s Quinchia project three separate porphyry centers with anomalous geochemistry and geophysics have been identified at La Cumbre, Manzanillo, and Dos Quebradas targets. Geologists have also identified gold mineralization at many related breccias and epithermal veins during their ongoing mapping and sampling surveys. Seven drills are currently on the property, with 5 rigs turning at La Cumbre. The 6th is drilling at the Manzanillo porphyry center, which is a geochemical and geophysical anomaly located about 750 metres northeast of La Cumbre. And the 7th rig is currently at a priority target located about 300 metres from the Dos Quebradas porphyry center. Also, an 8th drill is scheduled to arrive within the coming weeks, which will be used to explore other targets on Batero’s 1,400 hectare property such as the Structural Knot area and recently acquired Metacana artisanal mining camp.
La Cumbre Porphyry Drilling:
In Spanish “La Cumbre” means “the summit” so AngloGold began drilling this target near the mountain top. And because the initial discovery holes recovered long mineralized intervals beginning just below a thin cover of soil, BAT’s primary objective for Phase 1 drilling was to expand the lateral extent of known mineralization with step-out holes. Based on their successful results, the Phase 2 program now has 4 rigs step-out and infill drilling plus a 5th rig drilling deeper.
Phase 1 delineation drilling found La Cumbre’s eastern and western structural boundaries have an average width between about 200 and 400 metres. This target is still open to further exploration along the trend in both the north-northwest and south-southeast directions, and detailed surface mapping shows its strike could be about 600 metres long. Many of the holes ended in mineralization when the drill rigs reached their maximum lengths between 300 and 600 metres, so most of this target still remains open to exploration at depth. Batero is curious about how far down this mineralization extends so they have brought in a drill rig that can reach about 1,000 metres, and it has just began drilling the first deep vertical hole.
Since mineralization occurs on a hilltop only covered by soil, these drill intercepts imply La Cumbre has potential to become a large scale surface mine with a very low strip ratio. Furthermore, BAT’s geologists found alteration that appears to be a zone of secondary enrichment. Drilling into this zone averaged higher grade assays around 1 g/tonne gold and 0.15% copper, beginning at depths less than 15 meters, and across lengths from about 100 to over 200 metres, as listed in Table 1 of their latest news release
Exploration of this porphyry is now focused on developing the secondary enrichment zone’s potential to become a high grade starter pit. Informative maps and cross sections of this drill program including assay results and geological descriptions of each hole are located on Batero’s La Cumbre Project page.
After a landslide removed the thin cover of soil and vegetation to expose this hillside of rusty porphyritic rock, Batero’s geologists are sampling it for assay with help from local workers.
Porphyry Prospecting in Colombia’s Mid-Cauca Gold Rush:
For GoldForecaster.com subscribers.
Batero’s Management and People:
Batero Gold’s management has operated large exploration programs that became significant discoveries in both Colombia and Canada. Consequently, when La Cumbre’s step–out holes continued intersecting mineralization they were able to quickly and efficiently ramp up drilling from Phase 1 to Phase 2. Vancouver based CEO Brandon Rook is an accomplished exploration geologist and manager with over a decade of field experience. Mr. Rook also has a degree in sociology, was previously the CEO of Altas Minerals Inc., and was the managing partner of a geological consulting firm. The company has an experienced board of directors with strong technical and financial backgrounds, and is owned by top institutional investors.
Batero’s Colombian Exploration Manager Rafael Alfonso Roa previously held the same position with AngloGold Ashanti from 2003 to 2008. He helped pioneer the exploration of gold rich porphyries in the Colombian Andes using modern techniques including soil geochemistry and geophysics, which he used to make numerous discoveries including La Colosa, San Luis, and Quinchia. As a Colombian Vice President for the major miner he was also responsible for developing their social and political strategies. Furthermore, in this role Mr. Roa has effectively implemented a modern sustainable development approach towards this project over many years by working with the local community to pro-actively address social and environment issues relevant to the project. He also helped found the Colombian Chamber of Mines, and is an advisor to the Colombian Department of Mines and Geologic Service called Ingeominas.
Mr. Roa’s core team of Colombian geologists and professionals who are now working for Batero includes senior geologists overseeing the exploration drilling and field program, human resources and community development professionals, accountants, and legal counsel. Members of BAT’s team drilled the discovery holes at Quinchia with AngloGold in 2006 and 2007, and over the past 5 years their social and environmental group has developed an excellent relationship with the local community. More than 250 local farmers and villagers are also currently helping explore this project today, many of whom were previously trained by AngloGold to collect outcrop and soil samples safely while following standard industry QA/QC procedures.
Income these locals earn from exploration work is a boost to what they otherwise typically make by farming coffee and bananas on their small hillside farms. It was obvious during my site visit the locals are very hard workers and familiar with digging in the hills. The Quinchia community is hopeful this exploration project can prove that at least one large surface mineable gold-copper deposit is hiding under the vegetation, because building a mine here would provide their community with a lot of good job opportunities over many years.
Drill rig at the La Lenguita target has dirt road access and connection to the power grid.
Colombia’s Emerging Markets:
For GoldForecaster.com subscribers.
Colombian Gold:
For GoldForecaster.com subscribers.
Conclusion:
Colombia has recently developed into one of South America’s most attractive emerging markets for investors following a decade of political transformation. Today the government actively encourages direct foreign investment and is negotiating several trade deals with an emphasis on developing their mineral resources. Gold mining has played a very important role in this country’s society and economy throughout history and geologists believe their under-explored extension of the Andes has outstanding potential to host many world class mineral deposits. After revising their mining law, several world class multi-million ounce gold discoveries have been made near historic artisanal workings by applying modern prospecting methods. Just in the Mid-Cauca River Valley alone over 27 Million ounces of gold have been discovered within the past 10 years, mostly at La Colosa, Marmato, and Titribi. Building upon these discoveries, Colombia is now poised to emerge as one of the planet’s next major gold mining areas in the future. Therefore, I anticipate that major gold mining companies will soon begin making moves into this region by acquiring the best Canadian listed explorers as they look to bring new gold mines into production.
Batero Gold Corporation has accomplished Colombian and Canadian geologists and management, plenty of cash, and an excellent share structure supported by top institutional investors. Recently announced drill results from La Cumbre imply this porphyry has geologic potential to be of size similar to other world-class deposits recently found in the Mid-Cauca mineral belt, plus Batero’s Quinchia project is exploring two more gold rich porphyry targets at Dos Quebradas and Manzanillo. With support from the local community and the national government behind them, if Batero can prove that they have found an economic multi-million ounce gold deposit, this property has the infrastructure and social incentives in place to expedite mine development. Considering Batero’s talented team and their Quinchia property’s geologic potential, I am looking forward to their first NI 43-101 compliant resource estimate in Q4 2011.
Simon Russell
Mining Analyst, GoldSeek.com
Simon Russell is a mining and geological engineer with 10 years of diverse experience. His background includes hydrology and environmental engineering, exploration geology, underground contract mining, mine engineering and project management, and mine investment analysis. Mr. Russell has worked for many different types of mineral projects internationally and across the western United States for investors, consulting firms, and both major and junior resource companies.
Mr. Russell is not and investment advisor, nor is this an investment advice.
Original Publication date: June 21st, 2011
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-- Posted Wednesday, 13 July 2011 | Digg This Article
| Source: GoldSeek.com
