VANCOUVER — Patience is paying off for Bellhaven Copper & Gold (TSXV: BHV).
The company acquired the La Mina property — which sits 45 km southwest of Medellin in Colombia — in mid-2010, and within two years Bellhaven had delineated 1.6 million inferred oz. gold in two deposits. But the most tantalizing target remained out of reach, because Bellhaven’s ground stopped at the western edge of the La Garrucha magnetic anomaly.
In April, after lengthy negotiations, the company signed a deal with AngloGold Ashanti (NYSE: AU; LSE: AGD) to earn into the ground that covers La Garrucha. The deal meant Bellhaven could finally drill a hole into the anomaly.
In early June Bellhaven announced results from the first hole, which returned one of the company’s best intercepts from La Mina to date. Hole 1100 cut through two short mineralized intervals before hitting 217 metres of rock grading 1.31 grams gold per tonne, 0.15% copper and 5.6 grams silver per tonne, starting from 143 metres downhole.
The hole’s earlier intercepts included 15 metres of 0.41 gram gold and 2 grams silver from 14 metres depth, and 22 metres of 0.38 gram gold and 1 gram silver from 99 metres downhole. Before reaching more than 400 metres into the ground, the drill cut through another intercept bearing 0.59 gram gold and 9.1 grams silver over 19 metres.
Bellhaven had previously drilled a few holes near the western edge of the La Garrucha anomaly with interesting results, such as 3.9 metres grading 0.79 gram gold. Hole 1100, however, was the first to probe the middle of the target zone. As Bellhaven CEO Julio Benedetti commented at the time: “It is rather unusual . . . for a company to drill such a remarkable hole on its first attempt.”
The company has also released results from another two La Garrucha holes. Drilled from the same pad, holes 1101 and 1102 encountered mineralization within 10 metres of surface, and their results demonstrate that mineralization grading better than 1 gram gold persists over 300 vertical metres.
Hole 1102 was designed to test the updip extension of the hit in hole 1100. It returned five intercepts. The upper three were quite short, but the fourth intercept carried 1.01 grams gold, 0.17% copper and 5.5 grams silver over 158 metres, starting 67 metres downhole. The upper hits included 6 metres of 0.71 gram gold and 1.6 grams silver and 8 metres of 0.4 gram gold, 0.26% copper and 3.8 grams silver, while a final deep hit returned 36 metres grading 0.34 gram gold, 0.13% copper and 10.3 grams silver.
Hole 1101 pointed to the northwest — passing over the top of the anomaly. But the hole produced four intercepts, including 80 metres of 0.49 gram gold and 1.8 grams silver from 95 metres depth, and 96 metres of 0.5 gram gold, 0.13% copper and 4.1 grams silver from 279 metres downhole.
The numbers alone tell an interesting story, but the alteration zone within the cores adds further intrigue. In hole 1100, the first two intervals showed sericitic alteration that is characteristic of a porphyry’s upper level. By the third and fourth intervals the core had transitioned to potassic alteration, which is characteristic of the deeper levels of a porphyry.
Sericitic and potassic alteration suggests that the full vertical profile of the porphyry could be preserved at La Garrucha. Such is not the case at the neighbouring La Cantera deposit, where the upper sericitic layer has eroded.
There’s another aspect to La Garrucha that makes it enticing relative to La Cantera: the La Garrucha magnetic anomaly is almost twice the size of the anomaly that drew Bellhaven to La Cantera, a deposit less than a kilometre away, where Bellhaven proved up a resource containing 1 million oz. gold in just 14 months. La Cantera hosts 40.6 million inferred tonnes grading 0.77 gram gold and 0.31% copper.
The other deposit at La Mina, the Middle deposit, is adjacent to La Cantera and hosts 39.3 million inferred tonnes averaging 0.47 gram gold and 0.16% copper.
With drills at La Garrucha returning good intercepts, Bellhaven believes it has discovered a third porphyry at La Mina. If this proves correct, Bellhaven hopes La Cantera, Middle and La Garrucha could combine to create a new gold-porphyry district in the Middle Cauca belt of Colombia. The Middle Cauca is already proven gold territory, home to Gran Colombia Gold’s (TSX: GCM) Marmato project and Sunward Resources’ (TSX: SWD) Cerro Vetas property.
Bellhaven’s deal with AngloGold for the central La Garrucha ground requires the junior to invest US$8.5 million over three years and define a National Instrument 43-101-compliant resource to earn 100%. If the resource contains less than 3 million equivalent oz. gold, Bellhaven can retain full ownership.
If the resource grows beyond 3 million equivalent oz. gold, AngloGold has the right to back in for a 51% stake by paying Bellhaven US$17 million. The major can then boost its stake to 75% by fully funding La Garrucha to prefeasibility.
In this first year of the deal, Bellhaven plans to complete 4,800 metres of drilling at La Mina, with 2,000 of those metres probing La Garrucha. After that, Bellhaven plans to shift to Cristalina, a gold-copper target 600 metres south of La Cantera defined by a magnetic high and corresponding geochemical indicators.
The company has $2 million in the bank, which it is trying to make last. In early June Bellhaven cut costs by closing its Denver office, terminating three geologist positions, reducing salaries by 20–25% for key personnel — including the company’s president — and 25% reductions to the fees paid to Bellhaven’s independent directors.
News of the latest results from La Garrucha did little for Bellhaven’s share price, which closed down 1.5¢ at 10¢. The company has a 52-week trading range of 6¢ to 31¢, and 137 million shares outstanding.
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