Calvista carves out piece of rich Colombia gold district

Vancouver — Clutching a few small blocks of property in what is probably Colombia’s most famous gold mining district, Calvista Gold (CVZ-V) is having little trouble hitting gold.

Results from the company’s 15,000-metre, phase I exploration program at its Buenavista and Callejon Blanco prospects have shown numerous encouraging gold hits and the company plans to launch a second phase of drilling shortly.

At Callejon Blanco, which saw the vast majority of the drilling, results included hole 5 that hit 344.4 metres averaging 1.11 grams gold from surface, hole 11 that cut 9.8 metres carrying 14.89 grams gold from 104 metres downhole, hole 21 that returned 23 metres grading 18.78 grams gold from 465 metres depth, and hole 27 that cut 16.7 metres carrying 9.85 grams gold from 37 metres depth and then 9.2 metres averaging 10.06 grams gold from 59 metres downhole. Results from Buenavista include hole 3 that cut 36.19 grams gold from 355 metres depth.

Both targets form part of the company’s California project, consisting of 11 mining titles spread over six separate blocks of land and totalling 158 ha owned and 44 ha optioned. The land sits contiguous to Galway Resources (GWY-V) California project and what was Ventana Gold’s La Bodega project before it was bought out by Eike Batista’s EBX Group, while Eco Oro Minerals’ (EOM-T) La Plata project is also next door and its Angostura project sits only a few km away.

But with such neighbours expectations come high, and so despite previous results from California including 30.4 metres grading 6.8 grams gold and 1.5 metres averaging 110 grams gold, Calvista’s share price has been on a slow decline on little volume since listing in May 2011 at a dollar. But on news of the latest results the company’s share price climbed 4¢ or 10% to 45¢, while it was trading near its 52-week low of 32¢ only days before.

In releasing the latest results Calvista reports that it has established a new mineralized zone with a 700-metre strike distance at Callejon Blanco, and at the nearby Buenavista prospect it has established a 300-metre strike distance. The company expects to put a resource estimate out on the two targets that will incorporate all the latest drill results. The company also completed 4,800 metres of drilling as a private company in 2010 that will factor into the resource.

Calvista is currently headed by Mark Haywood as president and CEO, the third person in the role since going public less than a year ago. Haywood replaced Michael Johnson in February, who in turn replaced Gerald McCarvill last July. McCarvill is still on Calvista’s board as a director but is concentrating his efforts on privately-held Norvista Resources. Calvista came about as a joint venture between Norvista and an organized group of local Colombian miners, while Solvista Gold (SVV-V) came about though a joint venture between Norvista and Bob Allen’s Bullet Holdings. Ruben Shiffman, Calvista’s executive chairman, is also vice-chairman at Solvista.

With land in the area highly-sought, ownership fractured and active miners wanting compensation, Calvista has had to strike several option agreements for varying degrees of ownership of the land. The company secured the right to acquire 8 mining titles in full for US$2.16 million and 9 million shares to the miners’ collective, plus US$1.43 million and 2 million more shares if work continues through mid-2012. The company is also on the hook for a one-time cash payment of US$12 per oz. of reserves within 3 years of the acquisition agreement up to a maximum of US$12 million.

Calvista has an option agreement for 100% ownership on a ninth title for a $2-million earn-in plus 500,000 shares and a royalty, and a total of $960,000 and 1.3 million shares for a tenth title.

At the end of September the company had $9.2 million in cash and 48.7 million shares out. The company’s 10 million warrants have a $1.40 strike price and its 4.8 million options have a $1 strike price.