B2Gold commits more money to Nicaragua

Calibre Mining (CXB-V) and B2Gold ( BTO-T, BGLPF-O ) are taking their relationship to the next level with B2Gold committing to spend $6 million for an additional 19% of the Primavera gold-copper porphyry project and surrounding 322 sq km of Borosi concessions in northeastern Nicaragua. The financial commitment will bring B2Gold’s stake in the joint-venture to 70%.

The deal—which involves B2Gold spending the money over three years— excludes 463 sq km of other concessions that Calibre owns in the Central American country. B2Gold completed its initial earn-in for a 51% stake in the project in January at a cost of $8 million.

In February, results of initial scoping level metallurgical test work on Primavera samples were encouraging. Four composite samples of Primavera porphyry mineralization were used in flotation tests. Gold recoveries ranged from 86% to 91% and copper recoveries from 94% to 98%. The partners said in a statement that the copper and sulphur “are strongly related to each other and recovering sulphur by flotation will recover most of the copper and gold.”

This year, at least $2 million will be spent on exploration and drilling at the project. The Phase I budget will pay for 1,500 metres of diamond drilling, geological and geophysical compilation and interpretation, geological mapping, and trenching.

Calibre discovered the Primavera prospect in 2011 and started drilling in November 2011. In January 2012, the company announced that drillhole PR-11-00 had returned 103 metres of 0.85 gram gold and 0.324% copper starting from surface.

So far, 32 drillholes (13,414 metres) have been completed. The partners have also wrapped up a geophysical program with air magnetic and radiometric surveys flown over the claim area. Drillhole PR-12-016, which confirmed shallow continuity of porphyry style mineralization on the west side of the main Primavera Zone, returned 201.35 metres of 0.77 gram gold per tonne and 0.36% copper, including 57.85 metres of 1.08 grams gold and 0.49% copper.

Other highlights include drill hole 24 that yielded several deep intervals, including 17 metres of 0.39 gram gold from 595 metres to 612 metres, 1.1 metres of 18.28 grams gold, and 1.5 metres of 11.95 grams gold. The intervals “were all associated with vein and stockwork mineralization in intrusion breccia and diorite although the high grades for gold are unusual,” the companies reported, and said that more drilling will be required under the alluvium “where the geophysical data indicate the presence of a large magnetic low.”

The Primavera prospect is situated in a 5 km by 7 km area dominated by Tertiary volcanics in which quartz veins, diorite intrusives, and calcareous sediments have been mapped. The prospect area is associated with coincident gravity, magnetic and radiometric high signatures identified from an airborne geophysical survey, believed to represent a large intrusive centre, Calibre Mining says in its corporate literature. The area is thought to be prospective for epithermal, porphyry and skarn mineralized systems.

“Porphyry deposits around the world are known to occur in clusters aligned along major structural domains,” Calibre states on its website. “The drilling completed so far at Primavera suggests that temporal relationships with the intrusive occurrences are consistent with an evolving porphyry cluster. In addition, distal skarn mineralization may be indicative of widespread metal-rich fluids associated with the robust intrusive activity in the area.”

The Primavera gold-copper porphyry system is in the Bonanza-Siuna-Rosita mining triangle in northern Nicaragua, about 7 km south of the historic Santa Rita copper-gold skarn mine and within Calibre’s Borosi Concessions.

The project is road-accessible and just 1.2 km from the national power grid.

According to Calibre’s website, management holds 10% of the junior’s shares and B2Gold about 10.6%.

In addition to Primavera and other exploration properties in Nicaragua, B2Gold has two operating mines in the country: the La Libertad open-pit gold mine and Limon, an open pit and underground operation. In the first quarter of 2013, the two mines produced a total of 43,194 ounces of gold.

La Libertad produced 29,124 ounces of gold, which B2Gold says was 1,159 ounces higher than budget. The better numbers were due to improved gold grades of 1.98 grams gold and recoveries of 93.8%, the company said.

The Limon mine also posted a strong quarter, producing 14,070 ounces of gold. In March, Limon produced 5,200 ounces of gold—its best monthly production since B2Gold acquired the mine in 2009. Higher than expected quarterly gold production was due to a combination of higher than expected milled tonnes (108,030) and slightly higher than expected gold head grades of 4.43 grams gold.