CB Gold hits it big in Colombia’s promising Vetas district

Vancouver – Ten kilometres south of the rich La Bodega and La Mascota gold deposits in Colombia acquired by Eike Batista’s EBX Group earlier this year in its $1.5-billion takeover of Ventana Gold, CB Gold (CBJ-V) has drilled into a new gold zone with similar high grades.

Drill hole DDH11-046 from the company’s Vetas gold project returned 114.9 metres grading 7.57 grams gold per tonne from a previously untested portion of the Real Minera stockwork zone, including a 40.8-metre section grading 17.1 grams gold. CB Gold says a total of six holes have been drilled in the area so far with assays from five of the holes currently pending. High-grade gold mineralization in the hole started from a depth of 31 metres but assays from deeper sections of the hole, which reached a total depth of 442.9 metres, are also still in the lab. The company notes all six holes contained intercepts of visible gold and found the same structural zone.

CB Gold reports the stockwork zone occupies a previously undefined structural corridor that transects the porphyritic granodiorite intrusive and its host precambrain gneisses. Gold mineralization is found in two principal vein types, stockwork veins and grey quartz-pyrite veins, both of which coincide with zones of variably intense phyllic alteration and silicification.

In addition, the recently discovered mineralization is almost completely oxidized from surface to a depth of about 100 metres, indicating a large zone of near-surface material which may be easier to process than deeper sulphide mineralization.

CB’s Vetas project takes its name from Colombia’s Vetas gold district, sitting just to the south of the country’s famed California gold district in the department of Santander. Ventana Gold’s former 3.5-million-oz. La Bodega project straddles the borders of the two districts while Eco Oro Minerals’ (eom-t) 11-million-oz. Angostura gold project lies slightly further to the north. (Eco Oro changed its name from Greystar Resources earlier this year after fierce environmental resistance forced the company to back away from its plans to build a huge open-pit mine in the area’s sensitive paramo ecosphere.)

The Vetas property is home to nine small underground mines and contains several significant high-grade vein systems spread throughout the project. Besides the new high-grade area found in the stockwork zone, CB has also discovered porphyry mineralization, from which drilling earlier this year returned a 220-metre intercept grading 1.38 grams gold. The company plans on completing 35,000 metres of drilling at the property in 2011 with about 24,500 metres drilled to date using three rigs. As a result of the recent drilling success, plans to release a maiden National Instrument 43-101 resource in the first quarter of 2012 may be delayed.

CB listed on the TSX Venture Exchange in November 2010 at 45¢ a share but has 130 million shares outstanding and 167 million fully diluted as a result of its earlier days as a private company. CB’s president, Giles Baynham, and CEO, Fabio Capponi, hold approximately 10.8 million shares each; they previously worked together at Endeavour Financial. Non-executive chairman Peter Barnes, meanwhile, owns 4.3 million shares. He previously acted as chief financial officer of Wheaton River Minerals and as the CEO of Silver Wheaton (slw-t, slw-n) until earlier this year. Lastly, director Hernan Martinez, Colombia’s former Minister of Mines and Energy, holds 1.1 million shares, while VP of business development Ana Milena Vasquez owns 3.1 million.

CB’s stock closed up 22¢ to 90¢ on 2.24 million shares traded following the release of the high-grade drill results on Oct. 24. It has a 52-week range of 51¢-$1.54.