Colt quietly pursues advanced-stage exploration in Portugal

VANCOUVER — Montreal-based junior explorer Colt Resources (GTP-V) has focused on a few different projects since it hit the Toronto Venture Exchange last February, but its eye has always been on Portugal.

Colt is now the largest holder of mineral exploration rights in the country with roughly 1,620 sq.km worth of concessions that include resource-stage gold and tungsten assets. The company’s original focus was on its Penedono gold project, but Penedono subsequently took a back seat to Colt’s more promising Tabuaco tungsten deposit and recently permitted Boa Fé-Montemor gold concession,

“Portugal is really opening its doors to investment right now,” explains executive vice-president and chief operating officer Declan Costello by phone. “It has some economic issues people like to dwell on, but the reality is Portugal has invested heavily in infrastructure, including highways, electrical systems and so on. The country has a hard-working and well-educated workforce. It’s a wonderful foundation on which to build.”

Up until early this year, Colt was valued predominantly on its 100%-owned Tabuaco tungsten project outside of Vila Real in northern Portugal. The company is in the process of in-fill and metallurgical drilling at the site, targeting a pre-feasibility study by year end. Colt is taking aim at a 2013 construction schedule, with a one-year build-out period leading to first production in 2014.

Tabuaco has current indicated resources totalling 760,000 tonnes grading 0.58% tungsten trioxide (WO₃), and inferred resources of 1.3 million tonnes grading 0.57% WO₃.

In mid-February, Colt discovered the new Aveleira tungsten zone 750-metres north of its existing Tabuaco resource. Results from two holes collared at Aveleira include 6.1 metres carrying 1.25% WO₃, and 8.1 metres grading 0.44% WO₃,

“The discovery at Aveleira is very significant, insomuch as it is what we expected to find,” comments Costello. “As you drill along-strike on the mountainside you’ll hit more of this stuff. The grades and widths were very good, that’s positive from our perspective because it shows the project has the potential to really grow beyond the current two-million-ounce resource. We think that resource would support a mine in its own right, but we want to put a little more ‘meat on the bone’ going into feasibility.”

According to president and chief executive officer Nikolas Perrault, Colt is holding discussions with “potential industry players and strategic partners” to negotiate off-take agreements and explore joint-venture opportunities,

“The key thing regarding partnerships is the quality of the asset,” Perrault comments. “The grade is several times better than what’s being mined in Europe today, making it extremely attractive to many potential suitors, we just have to make the right decision for our shareholders.”

As resource drilling continues at Tabuaco, a new source of exploration excitement has emerged at Colt’s 100%-owned Boa Fé-Montemor gold concession 100-km east of Lisbon — Portugal’s capital city. Though the property is relatively new to Colt’s portfolio, it has a wealth of historical data from exploration programs dating back to Rio Tinto’s (RIO-N, RIO-L, RIO-A) environmental base-line studies in 1991. Boa Fé-Montemor was most recently held by Australian explorer Tamaya Resources through 2008 before the company was forced to relinquish its rights due to bankruptcy,

“Tamaya was building a copper mine in Chile when the financial crisis hit them very hard,” Costello says. “I look forward to the day we can look back on this and label it, in a polite way, serendipitous for our core shareholders.”

Due to roughly 30-years of high-quality drilling and trenching work, Colt needs to confirm only five-to-ten percent of its historic database at the central zone to bring the deposit up to resource-estimate standards,

“We still have a ton of money that we’d otherwise have to spend on prospect drilling and early stage exploration, to get a good handle on these deposits,” Costello comments. “This allows us to advance quite quickly, more quickly than any other company could with a project like this, given the fact we only started drilling three months ago.”

Drilling to date has focused on a non-compliant resource that sits within 100-metres of surface and totals roughly 610,000 oz. of contained gold at the central Boa Fé mining license. Colt has five rigs running with its main target being the Chaminé zone at the heart of the historic resource, though rigs are also collared at auxiliary targets, including: Casa Novas, Bracos, and Banhos.

Results at Chaminé to date, aimed at testing historic intervals, have returned high-grades including: 45.1 grams gold per tonne over 3 metres; 15.5 grams gold over 6.9 metres; and 31 grams gold over 3.4 metres. Colt’s most recent assays at the target were released to end April, and cut 5.6 grams gold over 17 metres and 23.6 grams gold over 5 metres.

“We firmly believe that we’re dealing with a major regional trend here,” Costello comments. “This is a system that has comparables around the world, in West Africa and possibly in Western Australia. It’s a regional shear system, and we control over 30-km of this thing. We know it’s only been explored close to surface, but we also know that similar deposits can extend to depth, so there is a lot of potential upside.”

Due to the shallow nature and relatively high-gold grades at the central Boa Fé experimental mining license — which includes Chaminé — Colt is currently working towards an open-pit model conducive to proving the projects economic viability. The company is planning on releasing a compliant resource estimate later this year, before stepping out to explore potential gold anomalies in the greater 732-sq.km Montemor land package,

“Once we get to mid-year and we publish our resource estimate, that will be a line in the sand,” Costello states. “It will demonstrate tonnes and grade for the project, and expand our exploration program to test for deeper extensions. We are defining new regional targets we can follow up on later this year. I must stress it’s not just one line of strike, we know there are repeat structures that imply many years of exploration ahead.”

Colt has 112 million shares outstanding and a presstime market capitalisation of US$48 million. The company completed a two-pronged US$8.7 million financing in early May. Colt announced a 10-million-unit, bought-deal private placement at 50¢ per share for proceeds of US$5 million, as well as a non-brokered private placement totalling 7.4 million shares at 50¢ per unit, raising an additional US$3.7 million.