Calibre Mining a golden bet in Nicaragua

VANCOUVER — Junior Calibre Mining (TSXV: CXB; US-OTC: CXBMF) appears well positioned to benefit from a trio of promising regional gold assets in Nicaragua.

The company is involved in a joint venture with B2Gold (TSX: BTO; NYSE-MKT: BTG), recently signed an agreement with Iamgold (TSX: IMG; NYSE: IAG), and is sitting on a third grassroots project that’s yielded strong results from surface work.

Calibre acquired all its ground in Nicaragua from Yamana Gold (TSX: YRI; NYSE: AUY) when the gold miner decided to focus on its assets in South America. At the same time, Calibre struck its JV with B2Gold.

 “That made the most sense since they are the most established group in the country, and they’re a great group of guys who really like the geology,” president and CEO Greg Smith says during an interview. “They’ve been pretty picky with these deals, so you won’t see a lot of other similar agreements down there.”

B2Gold locked up a 51% interest in a 322 sq. km property package by spending US$8 million on exploration, and is working on upping its stake to 70% by spending US$6 million over the next 2.5 years.

The companies made a discovery at the Primavera gold porphyry project 8 km south of the town of Rosita, and are working on a second target at the Minnesota property 16 km northwest.

Smith points out that all of Calibre’s land sits in what is known locally as a “mining triangle” due to historic production between the towns of Bonanza, Rosita and Siuna.

The company has a three-stage approach to exploration, with geochemistry playing a prominent role.

Smith explains that Calibre starts out with large, regional sampling programs before narrowing down targets via detailed soil grids and trenching. B2Gold now operates their Minnesota project, where the companies are in the midst of trenching, which has returned strong results.

“For quite some time now the Primavera, Minnesota and Santo Thomas targets have really been prioritized based on the size of the geochemical and geophysical anomalies. I think everyone is familiar with the porphyry discovery at Primavera, and we’re having a similar sequence of exploration events at Minnesota,” Smith says.

“The trench results have been impressive, with some good consistency in the samples that point towards a bulk-tonnage target. The numbers are as good, if not better, than we saw during comparable stages at Primavera.”

On July 8 Calibre announced trenching results at Minnesota of 1.76 grams gold over 62 metres, with trenches exposing intensely sericitized granodiorite with strong hematite staining and variable silicification. The gold mineralization seen in the trenches remains open to the north and south.

The Minnesota target area consists of intrusive hosted veinlets within a structurally prepared area with widespread alteration.

Meanwhile, the company sealed a deal with Iamgold in June that could see the producer earn a 70% interest in the junior’s 176 sq. km Eastern Borosi gold–silver project. Iamgold can earn an initial 51% by paying Calibre US$450,000 and spending US$5 million on exploration over three years, with a minimum US$1.5 million in the first year.

Iamgold can increase its interest to 70% by paying another US$450,000 and spending an extra US$5 million in exploration over three years.

Where the B2Gold JV focuses on bulk-tonnage porphyry targets, Calibre’s exploration with Iamgold will target low-sulphidation epithermal gold–silver deposits.

Through 9,400 metres of drilling on the Iamgold joint venture, Calibre has already outlined an initial resource at its Ricos de Oro target, which hosts 2.2 million inferred tonnes grading 3.2 grams gold and 60 grams silver for 222,300 contained oz. gold and 4.1 million contained oz. silver.

Calibre will be operator of a 3,400-metre drill program at Eastern Borosi that will focus on the Guapinol target, which has been prioritized based on surface mapping, historic underground development and previous shallow drilling, as well as soil and rock geochemistry.

Surface channel sample highlights at Guapinol include 1.3 metres of 21 grams gold and 13.3 grams silver, and 0.9 metre grading 9.6 grams gold and 108 grams silver.

“The geochemistry played a large part in our recent agreement with Iamgold,” Smith says. “These are large, regional grids basically following the trend of the structures. You can see a bit on the surface, like blocks of quartz or artisanal workings, but by and large it’s been the geochemical work that’s really defined these trends.”

He says the companies are looking at the same size and scale as the nearby private gold operation at Bonanza.

“Both deposits look to be controlled by the main regional trend, which is this northeast–southwest trend,” Smith says. “We have great targets we’re going after, including trenches or exposures along surface and some historic drilling.”

And with its joint-venture partners footing the exploration bills. Calibre has kept its treasury at a healthy level and is able to direct it towards its project in the western part of its Borosi concession, namely a wholly owned 253 sq. km land package in the Siuna district.

The company’s holdings there include the past-producing La Luz mine, which cranked out 2.3 million oz. gold between 1912 and 1968. Other regional targets include Cerro Aeropuerto, Montes de Oro, La Virgen, Rosquilete, Casa Blanca and El Avion.

Though Calibre sees potential in the old open pits at La Luz — including historic drilling in the footwall — it’s Montes de Oro that really has Smith excited.

In 2013 the company carried out trenching that found 52 metres grading 7.07 grams gold and 0.06% copper.

The company is also sitting on an inferred resource at Cerro Aeropuerto totalling 6 million tonnes grading 3.6 grams gold and 16.2 grams silver for 707,000 contained oz. gold and 3.1 million contained oz. silver.

“You have these historic mines that haven’t had exploration since the 1960s, after operating for around 100 years,” Smith says.

“In Siuna we’re looking predominantly at structurally controlled skarn deposits, so they aren’t simple ‘intrusives-butting-up-against-a-limestone’ kind of skarn. They’re actually within this sequence of largely volcanic rocks. That’s the same package we followed to the north through the targets we generated regionally, including Montes de Oro.”

Smith says he would love to get the drills turning at Montes de Oro “because the market responds to new discoveries,” but his team will wait on results from its joint-venture partners to see how the news drives its stock.

Calibre is sitting on US$1 million in treasury, and has managed its burn rate to ensure it’s in Nicaragua for the long haul. B2Gold holds a number of 5¢ warrants expiring in early August that could provide the company with more capital.

“Montes de Oro really looks to potentially provide that bang for your buck, because the market tends to like these discoveries. Again we’re narrowing it down with soils and trenching, and we seem to be dealing with two sub-parallel, high-grade structures within a broader anomaly,” he adds.

Calibre shares have traded be
tween 3¢ and 14¢ over the past year, and closed at 7¢.

The company has 188 million shares outstanding for a $13.2-million market capitalization.

Smith says Calibre has “attracted attention to Nicaragua” since teaming up with Iamgold and B2Gold, and that the wholly owned ground in Siuna is garnering interest from other potential partners.