Continental Gold strikes high grades at Buritica

Vancouver – The latest results from Continental Gold‘s (CNL-T) on-going 100,000-metre drill program at its Buritica gold project in Colombia show more high-grade gold intercepts.

Continental has been drilling on both the Veta Sur and Yaragua vein systems at the 18,000-ha Buritica project, located in the northwestern part of the country.

Testing the central Veta Sur system, hole 131 cut 17.9 metres grading 113.82 grams gold per tonne and 112 grams silver per tonne from 124 metres depth, including 1.2 metres carrying 1432.35 grams gold and 625 grams silver. The south-to-north trending hole was drilled in a scissor pattern with north-to-south trending hole 79 that previously intersected 14.3 metres averaging 446 grams gold and 166 grams silver.

The company is reporting that step-out drilling on Veta Sur indicates significant gold mineralization in multiple sub-parallel veins. The system has been identified over a 100-metre wide, 400-metre long and 350-metre deep area, while still open to the west and at depth.

The Yaragua system, sitting a few hundred metres northeast of Veta Sur, consists of several veins and has been feeding the largest underground vein mine in the Buriticia project area since 1992. On the western portion of the San Antonio vein, hole 129 hit 11 metres carrying 17.16 grams gold and 9.9 grams silver from 119 metres depth, including 1.25 metres grading 128.4 grams gold and 55 grams silver.

On the Yaragua B vein, hole 49 hit 13.4 metres carrying 6.54 grams gold and 4.6 grams silver from 60 metres depth, and hole 92 cut 3 metres averaging 24.37 grams gold and 30 grams silver from 158 metres downhole.

The company has five surface drills and two underground drills turning as it works to complete its sizable drill program by late 2011.

Continental Gold was founded by Robert Allen, currently chairman of the company, who pooled a number of mining permits to form the company earlier this year.

Since listing at $1.89 in April the company’s stock price has climbed markedly, rising to over $7 by late September before fluctuating somewhat.

Since November 17, however, Continental Gold’s stock price has only seen strong gains for seven days of trading, climbing $3.66 or 54.4% to end at $10.39.

The company closed a $68.4 million private placement in mid-September, issuing 12 million units at $5.70 each. The units held a share and a half-warrant, with full warrants exercisable at $7.50 for 24 months, with an acceleration threshold of $9.75.

The issuing, which fully diluted totalled roughly 19 million shares, represented just over 25% of the company’s 74 million shares listed at the time.

Since the financing, Robert Allen, through both personal holdings and several companies, now indirectly owns 30.2% of the company, while insider ownership totals 43%.