Drill Tracker Weekly: Step-out Drilling At Continental's Buritica May Be Prelude To Resource Update


Drill Tracker Weekly is not exclusive to Resource Investing News and is published with permission from Mackie Research Capital Corporation. It highlights drilling results in context with our database of over 10,000 drilling and trenching results. The purpose of this report is to highlight drilling and trenching results that stand out from the pack and compare them to their peer group. This report does not constitute initiation of coverage or a recommendation.

Continental Gold (TSX:CNL)

Price: $2.55

Market cap: $328 million

Cash estimate: $42 million

Project: Buritica

Country: Colombia

Ownership: 100 percent

Resources: Measured and Indicated: 8.39 Mt at 10.4 g/t gold, 31 g/t silver

Project status: Revised Resource expected Q2 / 2015 with PEA in Q4/2015

graph Infill and step-out drilling on the Veta Sur and Yaragua vein systems on the Company's 100% owned Buritica Project in Antioquia, Colombia continues to intersect high-grade intervals leading into an updated resource expected in Q2/2015. The Company has completed 285,000 metres of drilling 60,000 metres of which is not included in the current resource estimate December 2013). Since the December 2012 year end, the Company has spent over $127 million advancing the project making it one of the largest global exploration projects. Highlights from Veta Sur step-out drilling below and to the east of the existing resource returned high grade values including 5.7 metres of 50.7 g/t Au and 15g/t Ag, as well as 1.3 metres of 178 g/t Au and 109 g/t Ag. The mineralization at Buritica occurs as swarms of narrow sub-parallel carbonate base metal gold/silver veins, with higher grades and often wider zones occurring when a later gold rich phase overprints earlier mineralization. True widths in most holes are reported to be between 50 and 80% of the reported drill interval. In May 2014, using a 3 g/t Au cut-off, the Company announced an updated measured and indicated resource estimate at the Buritica deposit totaling 8.39 million tonnes grading 10.4 g/t Au, 31 g/t Ag and 0.5% Zn, with an additional 16.7 million tonnes of inferred grading 7.8 g/t Au, 24 g/t Ag and 0.3% Zn. While calculating the resource, each vein is given a hard geological boundary to prevent smearing the high-grade between vein systems. The total resource is comprised 60% from the Yaragua vein system and 40% from Veta Sur. The November 2014 PEA outlined gold production during the first 5 years of 314,000 ounces of gold per annum at an expected cash operating cost of $389 per ounce. The project has an initial capital cost of $737 million with sustaining capital of $346 million over the 18 year life. The vein systems are near vertical and are expected to be mined using long- hole stope method accessed from a development drive situated in the valley bottom. The model predicts an overall average mining dilution of 58% due to the les selective but more cost effected long-hole stopping method. Waste material will be backfilled into mined out stope providing the working platform for the next level.


Development History Small Pre-Spanish historical producer;

Continental Gold acquired the property in 2007. Yaragua Mine in small scale production for 22 years

Current Drilling: 5.7 meters at 50.7 g/t gold, 25 g/t silver; 2.65 meters at 91.2 g/t gold, 42 g/t silver