Underground development tunnels at Buritica (Source: Continental Gold Ltd.)

Underground development tunnels at Buritica (Source: Continental Gold Ltd.)

Colombian gold developer and winner of the Mining Journals 2013 Exploration Award, Continental Gold (CNL:TSX), which is developing the multi-million ounce high-grade Buritica gold project released their updated mineral resource estimate.  The estimate saw total gold ounces increase by nearly 1/3 (~30%) from 5.4 million ounces to 7 million ounces.  M&I ounces increased by over 70% to 2.8 million ounces from the previous 1.64 million ounces.

This was attained by increasing the total tonnage included from 3.74Mt to 8.39Mt and represents successful infill drilling which was the company’s focus.  The company remains on track to meet their stated goal of growing Buritica to over 10 million ounces of gold and to be in production by 2017.

The average grade dropped slightly from 9.9g/t to 8.7g/t (a drop of 12% for total ounces).  M&I grades dropped the most from 13.6g/t to 10.4g/t using a 3g/t gold cut-off (representing a drop of 24%).  The drop in grade should be seen as acceptable given the success in upgrading inferred ounces to M&I as well as the total increase in ounces.

Grade/Tonnage charts for the Buritica project (Source: Continental Gold Ltd.)

Grade/Tonnage charts for the Buritica project (Source: Continental Gold Ltd.)

This resource updated the October 2012 resource estimate and is based on a total of 202,982m of drilling and 3,735m of underground sampling.

The release indicates that 65% and 78% of the Yaragua and Veta Sur vein resources, respectively are situated above the 1,200m elevation which represents the main access elevation.  A large portion of the M&I gold ounces are also situated above this level, meaning that access to the majority of the known deposit will be made through the main access as proposed in the current development plans.

Continental Gold’s management believes there is much remaining potential at the Yaragua and Veta Sur vein systems as they remain open both at depth and laterally.  Also of note in the release is that the current resource excludes a number of high-grade veins in these two systems which saw limited drilling by the resource estimate cut-off date of December 31, 2013.

Ari Sussman, CEO of Continental Gold commented: “Although our precious metal resource estimate grew from the prior estimate, we are particularly pleased with the approximately 70-per-cent increase of our measured and indicated gold resource.

Additionally, we look forward to further growth in all resource categories as underground drilling has just begun from the Higabra Valley tunnel, located at an elevation of 1,170 metres, which is below the elevation of much of this resource estimate. It is of particular importance for us to add measured and indicated resources around the 1,200-metre elevation and proximal elevations, as this potentially opens the door to mine plan scenarios with even greater throughput rates than currently being contemplated.”

Continental is still cashed up having ended Q1/2014 with $103 million in cash.  The company has outperformed the GDXJ index YTD:

CNL Chart

Remaining Catalysts:

  1. Signing of Remaining 2 Sub-Contracts with Artisinal Miners (Q3/2014)
  2. Environmental Permits (Q2/Q3 2015)
  3. Updated Resource Estimate (H2 2015)
  4. Pre-Feasibility Study (H2 2015)

Read: Continental Gold Announces an Updated Mineral Resource Estimate for the Buritica  Project, Colombia

Forward-Looking Statements: This article includes certain “forward-looking information” within the meaning of Canadian securities legislation. Forward-looking statements include predictions, projections and forecasts and are often, but not always, identified by the use of words such as “seek”, “anticipate”, “believe”, “plan”, “estimate”, “forecast”, “expect”, “potential”, “project”, “target”, “schedule”, budget” and “intend” and statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be achieved and other similar expressions and includes the negatives thereof. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding the potential of the Company’s properties are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are based on a number of material factors and assumptions. Important factors that could cause actual results to differ materially from Company’s expectations include actual exploration results, changes in project parameters as plans continue to be refined, future metal prices, availability of capital and financing on acceptable terms, general economic, market or business conditions, uninsured risks, regulatory changes, delays or inability to receive required approvals, and other exploration or other risks detailed herein and from time to time in the filings made by the Company with securities regulators. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ from those described in forward-looking statements, there may be other factors that cause such actions, events or results to differ materially from those anticipated. There can be no assurance that forward-looking statements will prove to be accurate and accordingly readers are cautioned not to place undue reliance on forward-looking statements which speak only as of the date of this article. The Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Disclaimer: This article is not intended to meet your specific individual investment needs and it is not tailored to your personal financial situation. Nothing contained herein constitutes, is intended, or deemed to be — either implied or otherwise — investment advice. Continental Gold Ltd. is a client of Pacific Website Company Inc., owner of the CEO.CA blog, and therefore our coverage of the company should not be considered fully independent or unbiased. We also have a financial interest in Continental Gold which may change at any time without further notice. While the information herein is believed to be accurate and reliable it is not guaranteed or implied to be so. The information herein may not be complete or correct; it is provided in good faith but without any legal responsibility or obligation to provide future updates. Neither Travis McPherson, nor anyone else, accepts any responsibility, or assumes any liability, whatsoever, for any direct, indirect or consequential loss arising from the use of the information in this article.