Caerus tries to get into Colombia again

Caerus Resource (CA-V) is trying yet again to gain a foothold in Colombia.

The junior disappointed the market in January when it announced that its letter of intent with privately held White Gold had fallen through, leaving the company with no significant assets. The announcement Knocked Caerus shares down from 42¢ to 21¢.

Now the Vancouver-based company says it has signed another such letter of intent – this time with a company called Empressa Minera El Pino (EMEP).

If successful this time around, Caerus will be claiming the El Pino Gold Mine in the Antioquia province as its chief asset.

Caerus is paying EMEP a non-refundable amount of US$10,000 to gain access to the property so that it can perform due diligence over the next 90 days.

The agreement to acquire the project outright will cost Caerus a total of US$960,000 and 250,000 shares. The company currently has 12.4 million shares outstanding.

The company says El Pino Gold is a producing mine, albeit a very small one. Caerus says it has been told by EMEP that the mine is producing 2 oz. of gold per day from the milling of 2.5 tonnes of ore.

That production, however, has not been confirmed by a legitimate third party and the property does not have a NI 43-101 compliant resource.

Caerus went on to say that current gold production is coming from high grade fault breccias accessed by a tunnel on the property. The fault breccias trend north and have been mapped to be 3 to 20 metres thick running along a strike of roughly 3,000 metres.

It also says three breccias outcrop within the 19.75 sq. km project area but only one has been evaluated so far.

The project sits 4-km from the town of Maceo along the main highway from Medellin to Bucaramanga and had been under the control of AngloGold Ashanti (AU-N) which did a first pass exploration program back in 2007.

Anglo is reported to have taken 232 samples and did 1,655 metres of drilling. Highlight intersections included 3.83 metres grading 0.967, 14 metres grading 0.8 grams and 1.5 meters of 6.3 grams gold.

Caerus had built up its market value through 2009 on the back of the supposed acquisition of White Gold’s ground which is situated Greystar Resources’ (GSL-T, GSL-L) Angostura and Ventana Gold’s (VEN-T) La Bodega property in the northeastern flank of Colombia.

But White Gold cancelled the deal because the plan of arrangement — which was initiated in September of last year — was not completed by the Dec. 31 deadline.

Caerus argued that the arrangement was not completed because it hadn’t yet completed due diligence on White Gold’s ownership of the properties — and it blamed White Gold for its failure to do so.

Caerus said at the time that White Gold never proved that it was the registered and recorded owner of the permits.

Word of the new plan of arrangement with EMEP actually sent Caerus shares down. On Apr. 12, when the news was released, the company’s shares fell 15% to finish at 34¢. On Apr. 14 the company’s shares had climbed up a penny to 35¢ on 106,000 shares traded.