Buritica resource boosts Continental

Shares of Continental Gold (CNL-T) surged $1.09, or 12%, to $9.90 apiece, with more than 6 million shares changing hands on news of an updated resource estimate for the company’s Buritica project in Antioquia, Colombia.

Measured and indicated resources have grown to 3.74 million tonnes grading 13.6 grams gold per tonne for 1.64 million oz. gold, 38 grams silver per tonne for 4.6 million oz. silver and 0.7% zinc for 55.8 million lb. zinc, at a cut-off grade of 3 gram gold per tonne.

Inferred resources add 13.3 million tonnes of 8.8 grams gold for 3.76 million oz. gold, 33 grams silver for 14.20 million oz. silver and 0.5% zinc for 156.5 million lb. zinc.

The new resource was based on 112,600 metres of drilling and 2,332 metres of underground sampling, and includes both the Yaragua and Veta Sur vein systems — but the updated resource estimate excludes a number of veins in these systems, due to limited drilling as of June 30.

Most of the vein domains modelled in both Yaragua and Veta Sur are open at depth and along strike.

The Yaragua system has been defined along 900 metres of strike length and 1,300 vertical metres, and partially sampled in underground developments. Veta Sur has been defined along a strike length of 570 metres and 1,180 vertical metres.

The company describes the systems as being characterized by multiple, steeply dipping veins and broader, more disseminated mineralization.

Continental Gold, headed by Ari Sussman as chief executive officer, became a public company two and a half years ago, and released its first resource on Buritica in September 2011. Work on a preliminary economic assessment got underway in March.

Buritica — about 75 km northwest of Medellin, and accessible by paved road — is Continental’s wholly owned, 289 sq. km flagship project.

The company says that the Buritica complex is made up of a fine-grained, dioritic intrusion that hosts an outcrop area spanning 2 by 2.5 km. It also includes a small body of intrusive breccia known as the Yaragua diatreme.

Three generations of alteration have been mapped: an early silicification affecting Cretaceous sediments on the north and south flanks of the intrusive, a zoned potassic-phyllic-propylitic sequence and a later, retro-grade silica-sericite event associated with the emplacement of the diatreme and gold mineralization.

Buritica is the northernmost significant deposit in the Upper Miocene Middle Cauca belt, one of the three significant gold belts identified in Colombia, the company says. The belt contains porphyry and vein-style mineralization, in addition to the porphyry-related, carbonate base-metal gold-vein breccia system at the Buritica project.

In mid-September, Continental released results of initial drilling and underground channel sampling of old workings in the La Estera and La Mano areas, new mineralized vein systems south of the Yaragua and Veta Sur deposits. La Estera is between 100 and 300 metres south of the Veta Sur deposit, and La Mano is 300 to 400 metres south of the Yaragua deposit.

Drilling and underground channel sampling at La Estera uncovered up to three high-grade silver and gold vein systems (Northern, Central and Southern La Estera).

Highlights from the drill results included intercepts of 3.6 metres of 6.8 grams gold and 1,061 grams silver, and 4.4 metres of 8.3 grams gold and 41 grams silver.

Channel sampling returned assays including 6.2 grams gold and 362 grams silver over 1 metres, and 6.8 grams gold and 454 grams silver over 1.2 metres.

At La Mano, drilling returned intercepts of 1 metre of 9.1 grams gold and 1 gram silver; 1.7 metres of 6.6 grams gold and 9 grams silver; and 0.42 metre of 11.3 grams gold and 187 grams silver.

In late August, Continental received permission to modify its Environmental Impact Assessment so that it could build a 6 km switchback road from the paved road at the Buritica township down into the Higabra valley, where it plans to build the mine and mill.

The amendment to the permit also allows Continental to begin underground development in the valley by building a 5-by-4.5-metre, 1 km access tunnel, which gives the company access for underground drilling to infill drill the Yaragua and Veta Sur systems.

The tunnel will also serve as the main access for all underground development.

At press time, Continental was trading in Toronto at $9.43 per share within a 52-week band of $5.35 to $10.02. The exploration and development company has 111 million shares outstanding.