Bolero jumps on graphite trend

Proving there is healthy demand for new graphite plays, new entrant Bolero Resources’ (BRU-V) share price nearly doubled after announcing it had secured prospective graphite claims in northern Ontario.

The claims are contiguous to Northern Graphite’s (NGC-V) Bissett Creek claim block, a property that helped propel Northern’s share price from 90¢ in mid-January to an early April peak of $3.72. Bolero’s 50-sq.-km of claims fully surround the 30-sq.-km Bissett property.

On news of the announcement, Bolero saw 4.3 million shares traded as its share price doubled to 18¢, and briefly traded as high as 21¢. The company has 38.6 million shares outstanding, or 53.2 million fully diluted.

To secure the property, Bolero paid $50,000 on signing the deal and has agreed to pay a further $50,000 and 1 million shares once it is approved. GeoInvest Enterprises, the vendor, receives a 2% net smelter return royalty and a production royalty equal to $25 per tonne of all graphite mined from the property.

This is not the first time Bolero has made the most of a trend or area play.

In December 2009, the company secured an option on 44.5 sq. km of claims contiguous to Imperial Metals’ (III-T) Red Chris copper-gold project in northern B.C. and later added 13 sq. km. Bolero’s property border sits 5.5 km southwest of the Red Chris East zone discovery.

After completing preliminary work in 2010 on the property, which Bolero named Red Chris South, the company announced it would drill four holes totalling 1,400 metres in 2011 to follow up on two identified anomalies. After announcing the 2011 work plans in early July, the company’s share price spiked from 24¢ to a high of 58¢.

The excitement wore off by August and the share price dropped back to pre-announcement levels. It was not until early March 2012 that the company released results from the program. Of the four holes drilled, three hit no mineralization and a fourth returned a high of 0.0075% copper and 0.015 gram gold per tonne.

In March 2010 the company also jumped into the rare earth market, entering an option agreement on 226.6 sq. km of claims surrounding Spectrum Mining’s Wicheeda rare earth discovery in B.C. After preliminary surveying in 2010 the company drilled 1,830 metres in 2011 on the Carbonatite Syndicate property to test anomalies. None of the seven holes hit significant alteration or mineralization, so the company did not assay the holes.

The company is planning geochemical sampling on its rare earth prospect this year, while at the end of 2011 the company had spent $790,000 in acquisition costs and $2.2 million towards deferred development expenditures on the property.

In September 2010 the ­company took a go at the Yukon gold rush, acquiring 128 quartz claims covering 26.3 sq. km in the White Gold district “in close proximity to recently announced discoveries by Kaminak Gold . . . and by Underworld Resources.”

White Gold claims in 2010 consisted primarily of soil sampling, with the highest values coming in at 0.042 gram gold and 0.045 gram gold. Last year work concentrated on infill soil sampling and returned a high of 0.121 gram gold.

Bolero ended 2011 with $857,000 in working capital. The company is planning extensive work on its newly secured graphite project, and anticipates advancing its Red Chris South and Carbonatite Syndicate properties this year.