Romios explores next to Galore Creek (June 14, 2010)

Right now, nearly everything about Romios Gold Resources (RG-V) is small — its $1.3-million budget, its $15-million market cap and its 27-sq.-km Trek project– but the company believes that Trek’s location within the confines of the potentially huge Galore Creek copper-gold project in northwestern British Columbia could one day result in a big payoff.

On a map, the Trek property is a block of land nestled between the envisaged Galore Creek open-pit to the proposed mill site (about 15 km in distance). However, the project’s 50-50 owners, NovaGold Resources (NG-T, NG-X) and Teck Resources (TCK. B-T, TCK-N), are now looking at building an 11-km tunnel right through Romios’ Trek property to get there as a part of their revised prefeasibility study due out in mid-2011.

But the land has more value than that, claims Romios’ president Tom Drivas. The company has uncovered a promising mineralized zone close to the proposed mill with copper-gold mineralization found in porphyry and massive sulphide veins.

“We drilled here for the last two years with good results and we want to go back in June to start drilling again, hopefully with two to three drills to get a (NI) 43-101 resource,” Drivas says.

The discovery hole in October 2008 hit 131.4 metres grading 0.39 gram gold per tonne, 8.47 grams silver per tonne and 0.61% copper including 32 metres grading 2.06% copper, 1.05 grams gold and 25 grams silver. The mineralization was contained in a breccia zone.

Further drilling returned 151 metres grading 0.12% copper, 0.18 gram gold and 1.18 grams silver in a zone of stringer-type pyrite and chalcopyrite.

Another hole returned 5.5 metres of massive sulphide grading 0.14% copper, 8.49 grams gold and 4.1 grams silver.

The company will start with one drill in mid-June and will also do some geochemical mapping. Drivas hopes that if results are good, Romios shares will rise, making for less dilutive financing conditions.

“We want to kick start the drilling, hoping that we get some results and expand the program as we go along,” Drivas says.

Drivas blames the timing of the discovery on the slow development of the Trek project. First the Galore Creek project was shelved when construction cost estimates more than doubled to nearly $5 billion, then the world credit crisis made it nearly impossible for juniors to raise money in late 2008 and 2009, and then Teck found itself in dire straits after taking on US$9.8 billion in debt to buy Fording Canadian Coal just before the market crashed.

“So for the last few years the focus was not in that area but now the focus is coming back with Galore,” Drivas says.

He also points out that some major funds have invested in NovaGold including New York-based brokerage Paulsen & Co. with a $100 million investment and Quantum Partners, a private investment fund managed by Soros Fund management with nearly $75 million. A new prefeasibility study on Galore Creek is expected in mid-2011 and construction could start by 2013.

What Romios needs is some cash, so the company can develop resources on the project.

Drivas thinks the company has the potential to increase the market cap from $15 million to a few hundred million dollars just by drilling the targets the company has, but for now he realizes the hurdles ahead.

“At 15¢ a share we are trading as a shell,” Drivas admits. “These guys (NovaGold and Teck) want to send $3 billion to develop Galore; we are basically a rounding error in the total cost of the project.”

The company will also be doing further sampling and exploration work at its nearby Dirk and Newmont Lake projects.