Golden intercepts keep Dorato climbing (March 12, 2010)

Vancouver – The drills are again turning at Dorato Resources‘ (DRI-V) Cordillera Del Condor project in northwest Peru and the first-ever drill program in the region continues to return promising results.

Dorato is earning a 100% interest in an 800-sq. km land package in northern Peru’s Cordillera Del Condor region, which lies along the border with Ecuador. Despite its prospective locale adjacent to several significant gold deposits in Ecuador, the area had not seen a drill until Dorato started its initial program in December.

The project’s Taricori zone is home to open pit and underground artisanal workings. The first holes of the project, which probed the west side of the zone, returned such intercepts as 32.2 metres grading 1.03 grams gold per tonne, 14 metres of 0.93 gram gold, and 38.1 metres carrying 0.51 gram gold.

Dorato then moved the drill rig to the centre of the zone, where drills hit several short, mineralized intercepts in each hole. Results included 16.4 metres of 1.89 grams gold and 57.9 grams silver, 8.7 metres grading 3.29 grams gold and 61 grams silver, NX 2.4 metres of 8.42 grams gold and 187.7 grams silver.

Then, after stepping another 100 metres to the east, Dorato’s drill starting hitting its best intercepts to date. Hole 12, which had to be re-assayed using metallic screen analysis because of the abundance of fine gold, cut 18 metres grading 41.58 grams gold and 46.9 grams silver, starting 16 metres downhole, followed 15 metres later by 22.7 metres grading 2.96 grams gold and 16.2 grams silver.

And in the latest result from Taricoro, hole 13 has returned 38.9 metres grading 7.12 grams gold and 48.4 grams silver, starting at 13 metres depth and including 7.3 metres carrying 33.78 grams gold and 151.9 grams silver. Dorato calls this result provisional, as samples grading better than 30 grams gold are sent for re-analysis by metallic screen assay and the final grades may differ. When the high-grade segment of hole 12 was re-assayed, the gold grade improved.

Dorato says these intersections are considerably thicker and higher grade than those exposed by the informal underground mining, where workings usually track a mineralized zone over one to two metres. The company therefore believes its drilling effort is providing the first indication of the true size and grade potential at Taricori.

Results to date indicate the Taricori structure dips to the south and grades increase moving east. Drilling has only tested 250 metres of strike, though the prospective contact has been traced for more than 3 km on surface. In addition, the depth extent remains unknown – Dorato’s drills have only tested to roughly 100 metres depth – but the Jerusalem deposit, which is only a few hundred metres to the west, on the other side of the Ecuadorian border, extends to 450 metres depth. Dynasty Metals and Mining (DMM-T) owns the Jerusalem project, where it has defined 580,000 measured and indicated oz. gold from rock grading 12.4 grams gold plus 710,000 inferred oz. from rock averaging 11.5 grams gold.

And Dorato’s drills are now turning again, or will be as soon as the company can get crews back on the ground, after a two-week suspension. In mid-February the Peruvian government suddenly and unexpectedly suspended Dorato’s drill permit, which it had granted only in December, and asked the company to present evidence of its authorization to use the land.

Dorato was flummoxed by the request. The Cordillera Del Condor property sits on state land; according to Peruvian mining law when a company has mining claims and a valid drill permit for a project on state lands no further authorization is required.

It is likely the suspension actually related to a protest planned for the region a few days after the suspension. In mid-2009 a similar protest some 250 km to the south went horribly wrong when government troops opened fire on protestors, killing 12 people. As such the sudden suspension was likely meant to reduce the potential for another such incident.

Dorato, however, was not at all pleased that its nascent drill program had been derailed. The company lodged a raft of formal complaints and pushed the government to defend its move.

Now the Peruvian mining regulator Osinergmin has clarified that, as Dorato thought, a suspension can only be ordered as a precautionary measure or penalty in a sanctionary administrative procedure. And the regulator also conceded that no such procedure has been initiated against Dorato.

More practically, Osinergmin says the suspension was a mistake and that Dorato’s drill permit was actually valid the whole time.

After falling to 64¢ after its permit was mistakenly suspended, Dorato’s share price has staged a remarkable recovery, closing the second week of March at $1.03. The company has a 52-week share price range of 35.5¢ to $1.35 and has 69 million shares outstanding.