Continental struts its Colombian stuff (August 31, 2010)

There has been a lot of buzz in some circles over Continental Gold (CNL-T) thanks to its portfolio of some of the most prospective gold areas in Colombia.

The company’s land package was put together back in the 1990s just as investors were fleeing the troubled country. But Continental’s founder and Chairman Robert Allen saw an opportunity and managed to acquire some of the most choice mining permits the gold rich country had to offer.

And while Allen sold off interests in many of those grounds to Canadian exploration juniors and the like, he bundled some of the most prospective ones together under the Continental Gold banner and listed the company back in April of this year.

Investors not familiar with story are starting to see what some of the pre-IPO buzz was all about with the latest drill results released from the company’s current main focus, the Buritica Gold project in Colombia’s Antioquia province.

While the drill program tested two main areas on the property, the Veta Sur system and the Yaragua system, it was the results from Veta Sur that were most eye-popping.

All six holes at Veta Sur intersected gold mineralization in the form of veins and disseminations over a total width of more than 50 metres with a highlight hole intercepting 14.3 metres grading 446 grams gold and 166 grams silver – much of that grade came from an intersection of 3 metres grading 2,106 grams gold and 166 grams silver. The same hole also intersected 5.5 metres grading 100.2 grams gold and 88.3 grams silver.

Other significant intercepts from Veta Sur included 8.5 metres at 23.67 grams gold and 149 grams silver and 4.7 metres at 85.44 grams gold and 71 grams silver.

The company has now outlined mineralization at Veta Sur over 400 metres
horizontally and 350 metres vertically. The zone is still open laterally and at depth.

But not all the drill results came from Veta Sur. The Yaragua vein system also returned some stellar results with highlight intercepts of 5.9 metres grading 21.34 grams gold and 49 grams silver and 3.9 metres grading 31.98 grams gold and 40 grams silver.

The Yaragua system currently feeds the largest underground vein mine in the Buritica project area, which has been turning out gold since 1992.

Drilling at Yaragua focused on the extensions of Vein B to the east and the delineation of another vein set knonw as San Antonio.

The company says it hit potentially economic thickness and grades at Vein B over 350 metres horizontally and 300 metres vertically with highlight intercepts of 8.85 metres grading 10.28 grams gold and 9.3 metres grading 6.37 grams gold and 44 grams silver.

Mineralization at Buritica is currently described as base metal-carbonate type auriferous systems with gold mineralization in sets of high grade veins and also in breccias bodies.

The Veta Sur system is contiguous with and to the southwest of Yaragua and was only discovered in 2008.

Also of note from the results, was a drill hole put in the ground north of the Yaragua system.

The hole represented the first time the area had been drill tested and it returned 1.5 metres grading 64.82 grams gold and 2.7 metres grading 5.87 grams gold.

While not as impressive as some of the other results the hole does point to a newly discovered vein system.

Continental currently has five surface and two underground diamond drills turning at the Veta Sur and Yaragua systems.

In Toronto on Aug. 31 – the day the drill results were released – the company’s shares were off 5¢ to $5.50 on 5.1 million shares traded. That slight drop-off in share price comes, however, after a steady climb since its shares began trading in Toronto on April 19. Its shares opened at the $1.89 mark on that day.