Continental rebounds on Buritica results

Continental Gold (CNL-T) has released high-grade assays on 13 drill holes collared on its fully owned Buritica gold-silver-zinc property in Antioquia, Colombia. 

The 13 holes are part of a 2012 drill program at Buritica expected to exceed 60,000 metres. According to Continental CEO Ari Sussman, the well-funded gold explorer has a $58-million budget set aside for exploration and development this year, and is operating 10 rigs on the Buritica site.

The most recent results extend the Yaragua and Veta Sur systems. Stepout programs are targeting vein sets outside a resource estimate released in September 2011. 

The initial estimate identified measured and indicated resources at Yaragua and Veta Sur totalling 1.1 million tonnes grading 17.8 grams gold per tonne and 42 grams silver per tonne, or 630,000 contained oz. gold and 1.5 million contained oz. silver at a 3-gram gold cut-off. 

The 2012 drill program will target inferred resources in the two systems equalling 6.9 million tonnes of 11.4 grams gold and 43 grams silver totalling 2.5 million contained oz. gold and 9.5 million contained oz. silver. 

Continental continues to hit high-grade intercepts on the project, with the most recent 13-hole results returning notable grades at depths exceeding 500 metres. 

Holes 249 and 234 extend the strike lengths of several Yaragua veins to the west. Hole 249 features a 7-metre intercept grading 139.53 grams gold starting from 269 metres depth, including a 4-metre interval of 239.6 grams gold.  Hole 234 was a stepout 200 metres farther west that intercepted 1 metre of 46.7 grams gold. 

Stepouts to the east of Yaragua indicate the system may be continuous in that direction as well. Hole 230 highlights include 8 metres of 37.9 grams gold and 12 grams silver starting from 481 metres depth, marking the deepest and highest-grade intercept encountered on the system’s eastern extension. Hole 236 was collared farther northeast and returned intercepts from the northern vein system that include 3 metres grading 15.2 grams gold and 129 grams silver.

Continental also encountered new vein sets at Veta Sur, and a stepout to the southwest returned a 14-metre intercept grading 27.99 grams gold and 57.3 grams silver at 256 metres depth, including an interval of 3 metres grading 131.1 grams gold and 201.2 grams silver. 

Underground channel samples on the HW and Sophia veins provided more grounds for optimism: Sofia highlights include values of 89.7 grams gold and 63 grams silver over 2 metres true width. HW vein samples include grades of 24.4 grams gold and 44 grams silver over 1 metre along a 61-metre vertical raise. 

Continental is expanding its reserves and resources at Yaragua and Veta Sur. Yaragua has a drill outline of 650 metres along strike by 800 vertical metres, and Veta Sur’s outline has been intersected along 550 metres of strike and 1,180 vertical metres. 

Raymond James analysts say that “we recommend investors accumulate shares of Continental on what we view as significant exploration potential growth and rapid development [de-risking] of its key asset, the fully owned Buritica gold-silver-zinc project in Colombia.”

The capital-market firm predicts that the 2012 drill program will lead to an updated resource and reserve estimate in the third quarter, followed by a preliminary economic assessment on the project at year-end. Raymond James updated Continental to an “outperform” rating with a $12.50 target price in mid-February.

Continental shares bounced back 7%, or 53¢, during the March 8 trading session, closing at $7.95 per share after the company released assays on the 13 drill holes. 

The company had fallen to a first-quarter low of $7.27 per share on March 6, dropping over 9% on the same day as gold prices plummeted and a sell-off saw the S&P/TSX Composite Index decrease by 255 points.