Calvista hits in famous district

Clutching a few small blocks in what is probably Colombia’s most famous gold district, Calvista Gold (CVZ-T) is having little trouble hitting gold.

Results from the company’s initial 15,000-metre drill program at its Buenavista and Callejon Blanco prospects show numerous encouraging gold hits, and Calvista plans to launch a second drill phase soon.

At Callejon Blanco, which saw the vast majority of the drilling, results included hole 5 that hit 344 metres averaging 1.11 grams gold from surface; hole 11 that cut 10 metres carrying 14.89 grams gold from 104 metres downhole; hole 21 that returned 23 metres grading 18.78 grams gold from 465 metres depth; hole 27 that cut 17 metres carrying 9.85 grams gold from 37 metres depth, 9 metres averaging 10.06 grams gold from 59 metres downhole. Results from Buenavista include hole 3 cutting 36.19 grams gold from 355 metres depth.

Both targets form part of the company’s California project, consisting of 11 mining titles spread over six separate land blocks totalling 1.5 sq. km owned and 0.4 sq. km optioned. The land is contiguous to Galway Resources’ (GWY-V) California project and what was Ventana Gold’s La Bodega project before it was bought by EBX Group, while Eco Oro Minerals’ (EOM-T) La Plata project is also next door and its Angostura project only a few kilometres away.

But expectations come high with such neighbours. Despite previous results from California — including 30 metres grading 6.8 grams gold, and 2 metres averaging 110 grams gold — Calvista’s share price has been on a slow decline on little volume since listing in May 2011 at a dollar. On news of the latest results the shares climbed 10%, or 4¢ to 45¢, while it traded near its 52-week low of 32¢ only days before.

In releasing the latest results Calvista reports that it has established a new mineralized zone with a 700-metre strike distance at Callejon Blanco, and at the nearby Buenavista prospect it has established a 300-metre strike distance. The company is planning a resource estimate on the two targets within months, which will incorporate the latest drill results and  4,800 metres of drilling Calvista did in 2010 as a private company.

Calvista is headed by president and CEO Mark Haywood, the third person in the role since going public less than a year ago. Haywood replaced Michael Johnson in February, who in turn replaced Gerald McCarvill in July. McCarvill remains a Calvista director but is concentrating his efforts on privately held Norvista Resources. Calvista came about as a joint venture between Norvista and a group of local Colombian miners, while related Solvista Gold (SVV-V) came about though a joint venture between Norvista and Bob Allen’s privately held Bullet Holdings. Ruben Shiffman, Calvista’s executive chairman, is also vice-chairman at Solvista.

With land in the area highly sought, ownership fractured and active miners wanting compensation, Calvista has had to strike several option agreements for varying degrees of land ownership. The company secured the right to acquire eight mining titles in full for US$2.16 million and 9 million shares to the miners’ collective, plus US$1.43 million and 2 million more shares if work continues through mid-year. The company is also on the hook for a one-time cash payment of US$12 per oz. of reserves within three years of the acquisition agreement, up to a maximum of US$12 million.

Calvista has an option agreement for full ownership on a ninth title and $2-million earn-in, plus 500,000 shares and a royalty, and $960,000 and 1.3 million shares for a tenth title.

At the end of September the company had $9.2 million in cash and 48.7 million shares outstanding. Calvista’s 10 million warrants have a $1.40 strike price, and its 4.8 million options have a $1 strike price.