Colt Resources announces game-changing deep gold zone at Chaminé
By Steven Ralston, CFA
Today, Colt Resources () announced that the first two holes in its deep drilling campaign to test deep targets at the Chaminé gold deposit encountered gold mineralization between 200 and 400 meters below the surface. Namely, inclined hole (BFCH-12-041) intersected 2.07 g/t gold over 21.75 meters (including 4.69 g/t gold over 4.93 meters) and inclined hole (BFCH-12-039) intersected 0.60 g/t gold over 14.85 meters.
Previous historical drilling focused on near-surface gold mineralization along the regional shear within 100 meters of the surface. However, pursuing a conceptual model of a stacked system, which was somewhat indicated by prior shallower holes intersecting gold mineralization at deeper levels approximately 220 meters below the surface, Colt's management decided to embark on a deep drilling program.
The discovery of gold mineralization below the near-surface gold deposit at Chaminé is a game-changing event in our interpretation of the model of gold deposition along the Boa Fé shear zone. We believed, as did prior lease owners, that the gold mineralization was confined to near-surface kinks and folds of the Boa Fé shear zone. However, the assay results from these two drill holes now indicate that stacked layers of kinks and folds contain additional gold deposits. It is now probable, as management suggests, previous exploratory work has “only tested a relatively minor part of a potentially larger mineralized zone.” The next phase will include the application of downhole geophysical techniques to better target further deep exploratory drilling.
An updated 43-101 compliant mineral resource estimate is expected during the first quarter of 2013, which is expected to include recent drilling results at Chaminé, Casas Novas, Ligeiro, Braços and Banhos and also possibly Monfurado. The initial NI 43-101 compliant resource estimate for the Boa Fé experimental mining license area, which only included resource estimates for the Chaminé and Casas Novas deposits, was announced in July 2012.
We reaffirm our Outperform rating and price target of $1.70, which is based on an estimated share value of attributable resources indicated by Colt’s initial NI 43-101 compliant mineral resource estimate and certain noncompliant historical resource estimates. We consider our valuation model to be conservative in that it also includes prospective developmental costs at Boa Fé and Tabuaço.
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