Continental Gold hits high grades at Buritica

VANCOUVER — The latest results from Continental Gold’s (CNL-T) ongoing 100,000-metre drill program at its Buritica gold project in Colombia show more high-grade intercepts.

Continental has been drilling on both the Veta Sur and Yaragua vein systems at the 180-sq.-km project, located in the northwestern part of the country.

Testing the central Veta Sur system, hole 131 cut 17.9 metres grading 113.82 grams gold per tonne and 112 grams silver per tonne from 124 metres depth, including 1.2 metres carrying 1,432.35 grams gold and 625 grams silver. The south-to-north trending hole was drilled in a scissor pattern with north-to-south trending hole 79 that previously cut 14.3 metres averaging 446 grams gold and 166 grams silver.

The company is reporting that step-out drilling on Veta Sur indicates significant gold mineralization in multiple sub-parallel veins. The system has been identified over a 100-metre wide, 400-metre long and 350-metre deep area, while still open to the west and at depth.

The Yaragua system, sitting a few hundred metres northeast of Veta Sur, consists of several veins and has been feeding the largest underground vein mine in the Buritica project area since 1992. On the western portion of the San Antonio vein, hole 129 hit 11 metres carrying 17.16 grams gold and 9.9 grams silver from 119 metres depth, including 1.3 metres of 128.4 grams gold and 55 grams silver.

On the Yaragua B vein, hole 49 cut 13.4 metres carrying 6.54 grams gold and 4.6 grams silver from 60 metres depth, and hole 92 intersected 3 metres averaging 24.37 grams gold and 30 grams silver from 158 metres downhole.

The company has five surface drills and two underground drills turning as it works to complete its sizable drill program by late 2011.

Continental Gold was founded by Robert Allen, currently chairman of the company, who pooled several mining permits to form the company in early 2010.

Since listing at $1.89 in April, the company’s stock price has climbed markedly, rising above $7 by late September before fluctuating somewhat.

Since Nov. 17, however, Continental Gold’s stock price has seen strong gains for seven days of trading, climbing $3.66 to $10.39.

The company closed a $68.4-million private placement in mid-September, issuing 12 million units at $5.70 each. The units held a share and a half warrant, with full warrants exercisable at $7.50 for 24 months, with an acceleration threshold of $9.75.

The placement, which fully diluted totaled roughly 19 million shares, represented more than 25% of the company’s 74 million shares listed at the time.

Since the financing, Allen, through both personal holdings and several companies, now indirectly owns 30.2% of Continental Gold, while insider ownership totals 43%.