Pershimco revives Panamanian project

VANCOUVER — Just two months after buying the Cerro Quema gold project in Panama, Pershimco Resources (PRO-V) is pulling long gold intercepts from the site as it works to twin historic holes and collar new ones in advance of a new resource estimate.

Cerro Quema is on the Azuero peninsula in southwestern Panama, about 45 km from the city of Chitre. A United Nations-supported national geological survey in the late 1960s identified the area as a potential gold deposit and, over the next 30 years, various companies explored the property. One of them, Campbell Resources, got to the point of designing and permitting an open-pit mine at the site, based on an historical National Instrument 43-101 non-compliant resource of 8.8 million tonnes grading 1.16 grams gold per tonne, but the low gold prices of the late 1990s derailed Campbell’s efforts.

The project eventually became a joint venture between Bellhaven Copper & Gold (BHV-V), Central Sun Mining (now part of Brigus Gold [BRD-T]), and two other parties. In September, Pershimco bought out everyone’s interests in a deal worth $6.4 million, of which $2.36 is payable in cash and the rest in shares and warrants. Pershimco now owns the project outright, aside from a 4% net smelter return royalty payable to the government.

Pershimco immediately started drilling, with the goal of validating and expanding the historic resource. The project is located within an east-west trending belt of volcanic rocks that strikes for 10 km and is roughly 1.5 km wide. Gold is found alongside silica-pyrite alteration, which is characterized on surface by highly fractured, vuggy, locally brecciated rock composed of silica and iron oxides. The oxide layer occurs over several dome features on the property.

Pershimco’s reverse circulation drill program is starting to produce results. Drills are attempting to cover the dome features uniformly, twinning historic holes and adding new ones. The first four holes hit gold, with the best intercept coming from hole 4: 128 metres of 1.41 grams gold, from surface. The other holes returned 74 metres of 0.51 gram gold, 97 metres of 0.17 gram gold, and 50 metres of 1.64 grams gold, all starting from surface.

And the second set of results was equally promising. Hole 5 cut 127 metres grading 1.04 grams gold, including 2.36 grams gold in the last 2 metres of the hole. Hole 6 returned 46.7 metres of 1.19 grams gold and hole 7 hit 76.2 metres averaging 1.02 grams gold.

Gold mineralization at Cerro Quema appears to have occurred in two separate events. Acid leaching and weathering then produced the current vuggy, leached cap. The highest gold grades actually occur near surface, as a result of weathering; the grade seems to diminish with depth, though a new NI 43-101 report on the project suggests the potential for copper mineralization below the oxide layer, which extends to some 150 metres depth.

Historic metallurgical testwork completed by Campbell indicates the mineralization at Cerro Quema responds well to regular leaching, with gold recoveries ranging from 80-95%. Campbell was also interested in the possibility of vat leaching, which returned similar recoveries.

Cerro Quema is road accessible and the national power grid is nearby. And the project already carries a Panamanian environmental certificate. The initial permit, granted in 2004, expired on late 2009 but was later extended until the end of 2012. Additional permitting would be required to bring the project into production.

Pershimco is well-funded to advance Cerro Quema, having recently closed a $4.1-million private placement. The company sold 9 million units at 35¢ apiece plus 2.2 million units at 45¢ each, with each unit comprising a share and half a warrant exercisable at 50¢ for a year.

Pershimco gained just half a penny on Cerro Quema’s latest drill results to close at 49.5¢. The company has a 52-week trading range of 8¢-60¢ and 86 million shares outstanding.