Colossus Advances Serra Pelada, Raises $20.5M

The first systematic assay results for the full suite of platinum group elements at Colossus Minerals’ (CSI-T, COLUF-O) Serra Pelada project in Brazil appear to confirm what Vic Wall, the company’s president, told The Northern Miner during a visit to the site last November — namely, that “there are very few mineral provinces on Earth that have this kind of endowment.”

Results released on Feb. 11 from Serra Pelada’s central mineralized zone have yielded up to 299 grams platinum per tonne, up to 387 grams palladium, up to 7.7 grams rhodium and up to 4.9 grams iridium.

Core samples from seven drill holes representing 128 metres of down-hole intersections in the central mineralized zone were fire assayed for gold, platinum, palladium, rhodium, iridium, ruthenium and osmium by Genalysis in Perth, Australia.

“The gold-PGE assay results would be extraordinary anywhere other than Serra Pelada,” Wall said in a statement. “Colossus’s work continues to add value to the Serra Pelada treasure chest, demonstrating that PGEs will contribute significantly to the worth of this remarkable deposit.”

Hole 702 cut 7.88 metres grading 406.4 grams gold per tonne, 98.4 grams platinum, 115.7 grams palladium, 2.74 grams rhodium, 1.52 grams iridium, 0.19 gram ruthenium and 0.03 gram osmium, including 1.87 metres at 1,431.3 grams gold, 248 grams platinum, 321.4 grams palladium, 6.5 grams rhodium, 4.21 grams iridium, 0.39 gram ruthenium and 0.1 gram osmium.

Hole 58A intersected, over a 1.9- metre interval, 169.1 grams gold, 13.64 grams platinum, 18.99 grams palladium, 0.43 gram rhodium, 0.59 gram iridium, 0.03 gram ruthenium, and trace osmium.

Other highlights include: 3.1 metres grading 115.9 grams gold, 35.57 grams platinum, 46.12 grams palladium, 1.33 grams rhodium, 0.75 gram iridium, 0.11 gram ruthenium, and trace osmium in hole 62; and 7.5 metres of 27.73 grams gold, 9.68 grams platinum, 6.62 grams palladium, 0.41 gram rhodium, 0.14 gram iridium, 0.03 gram ruthenium, and trace osmium in hole 104.

Over the entire set of assay results, platinum to rhodium ratios ranged from about 10:1 to over 40:1, which the company said will contribute significantly to the value of high PGE sub-zones at Serra Pelada.

The drill holes are from the more southerly sections of the central mineralized zone and the platinum and palladium ratios were higher than expected from historical data for the sub-zones, the company said.

The high gold-PGE sub-zone in hole 72 may prove to be continuous with those encountered in first-phase drilling in the upper and outer fold hinge, up to 200 metres northeast, the company added.

Currently, rhodium trades at about US$1,300 per oz. (It reached a high of US$10,000 per oz. in 2008). The hard transition metal is rare and found in platinum ores. It is used in alloys with platinum and as a catalyst.

Serra Pelada is about 434 km south of Belem, the capital of Para state, in northeastern Brazil. At the height of the gold rush there in the early 1980s, more than 100,000 artisanal miners worked in a 130-metre-deep open pit roughly the size of 15 soccer fields, from which they produced an estimated 2 million oz. gold.

Colossus Minerals recently traded at about $2.15 per share. Over the last year, it has traded between a high of $4 per share (June 30) and 43¢ per share (Dec. 9).

A day after the latest assay results were released, Colossus lined up a $21.5-million bought-deal financing with a syndicate of underwriters led by Macquarie Capital Markets Canada and including Canaccord Capital, GMP Securities, Dundee Securities, Haywood Securities and Blackmont Capital.

The brokerage houses are buying 10 million units, with a single unit priced at $2.15 and comprised of one share and half a warrant. A whole warrant allows the holder to buy a share for $2.70 within two years.

The underwriters also have an overallotment option to buy an other 1.5 million units on similar terms, which would bring in another $3.2 million in gross proceeds for Colossus.