Categories: Precious Metals
Topics: General Precious Metals

Ventana Gold

 

Hello all,

 

Yes indeed. We missed this one. It doesn’t happen very often, but we confess to being late to this party. The million-dollar question is, is it over yet?

 

 

Ventana Gold came onto the discovery scene on June 19th 2008, on releasing assays of hole 1 on their 100% La Bodega zone, in the California – Vetas gold mining district, Colombia. The hole returned 106.5 meters of 7.81 g/t gold, a huge intercept by any account. La Bodega is situated immediately adjacent to Greystar Resources’ world class Angostura gold/ silver deposit, hosting total resources of 15 mil ounces of gold and 79 mil ounces silver.

 

 

But Ventana was only listed on the Venture index as of November 7th 2008. Recently they continued reporting excellent grades and core lengths at La Bodega.

 

In their most recent releases last week, Ventana announced holes similar in grade and core lengths in their La Mascota zone. Three extra drills will start exploring the property further. This cumulation of good news virtually doubled the share price in just a few days. Since December, the SP has increased 35-fold.

 

 

Colombia

 

We have not analysed a junior active in Colombia for a number of years. How does Colombia stand in their approach to the resources sector? Columbia has a stable, right-of-center government not associated with nationalization policies characteristic of a number of neighbouring countries. It actively pursues pro-business policies, intent on attracting foreign investment, and supports mining activity in the country. Taxes on metals are 4% of 80% of the prices as quoted on the London Metal Exchange, and can therefore be considered low in comparison to world standards. A number of majors are currently present with large-scale operations, namely BHP Billiton, Anglo American and Xstrata. As such, the political risk of exploration and mining in Colombia is considered low.

 

 

La Bodega discovery

 

La Bodega is a typical high sulphidization epithermal gold/ silver deposit, resulting from hydrothermal activity originating from a deep seated quartz porphyry intrusive. The property is underlain by a broad zone of phyllic and argillic alteration, cut by veins with intervening stockwork veined and silicified intrusive rock with intrusive gneiss. Mineralization occurs as a series of parallel-sheeted vein zones, breccias and mineralized faults enveloped within this zone of alteration and intrusive rocks.

 

 

Ventana has completed over 25,000 meters of drilling in 112 holes, to date. Core drilling has concentrated on testing a 1,275-metre strike length extending south-westerly from the property line shared with Greystar Resources. The first 350 metres comprises the La Bodega zone, hosting the historical artisanal La Bodega mine. The next 200 metres comprises the La Rosa zone, where steep topography has severely limited drill access. The next 725 metres beyond La Rosa comprises the La Mascota zone, where drilling is currently concentrated. An additional zone, Las Mercedes, is a relatively new target area situated 400 metres to the south of the La Bodega zone. Estimated true widths of mineralization encountered are between 30m - 150m, and down-dip extensions of over 300m have been recorded.

 

 

The map below depicts the land packages surrounding Greystar’s Angostura deposit. Ventana’s properties are marked with the red dotted lines. The La Bodega, La Mascota and Las Mercedes zones, yellow circles on the map, are clearly on strike with the Angostura mineralization, and Greystar believes their Móngora zone is also likely to be part of the extension of the zone. Greystar has recently discovered a high grade zone in this area, and subsequently initiated an extensive drilling program.

 

 

Closeology

 

Let’s take a closer look at the adjacent Angostura deposit, as closeology conclusions are probably applicable to the Ventana discovery. After 277,000 meters of drilling, Greystar published a resource estimate in December 2008, quoting 15 mil oz Au, and just under 80 mil oz Ag. The deposit, which starts at surface and is amenable to open pit mining, contains an upper 30 meters or so of oxidized gold (around 20% of resources), and a lower body of high sulphidized gold, and runs without interruption onto Ventana’s property. In the sulphide zone, on the whole, the grades increase with higher sulphide densities. These areas are indicated by increasing pyrite contents. Further conglomeration of high grade mineralization is apparent in areas where veins intersect with other veins, or where veins intersect faults. Mineralization is apparent within and surrounding thick veins or conglomerations of thinner veins.

 

 

At a cursory glance, grades at Ventana’s property seem higher than the averages at Greystar’s deposit, and the mineralized zone appears to be getting narrower but richer as drilling progresses southwest on La Mascota. We don’t have sufficient data to support this hunch conclusively, however. The strike extensions have been frequent and large, over the recent months, indicating the continuity of mineralization is very solid and showing no signs of letting up. Depths and widths are also encouraging, and the recent discovery at Las Mercedes, 400m to the south, adds to blue sky speculations that Ventana’s deposit may end up having a deposit twinning that of Greystar, in terms of size. Should mineralization be proven to continue beyond La Mascota, beyond even Greystars property, and onto Ventana’s California – Vetas property, we will be in a completely different ball game. Long ways to go yet, though.

 

 

Another sign of belief in the company’s potential is the involvement of institutional investors. Lumina Capital, run by the famous mining entrepreneur Ross Beaty, has recently taken a 16.9% stake in Ventana, and now has a member appointed to the board.

 

 

With Greystar aiming to finish their feasibility study by Q3 2009, and arrange financing of the capital expenditures by Q2 2010, Ventana, with 6 drills turning, will have plenty of time to prove up a sizeable deposit in an initial resource estimate (planned later this year) so as to make the combined Greystar/ Ventana deposits an enormously appealing package for a resource-hungry major with cash to spend.

 

 

So is the party over? Well, with a current market cap exceeding $400 mil, Ventana certainly doesn’t come cheap. However, we believe there is enough potential for another round of drinks and caviar. But we better had participated in the private placement some months ago. Shares were priced at 4 cents! L

 

 

Willem Middelkoop, June 10th 2009

 

 

 

 

Disclaimer:

 

 

Willem Middelkoop’s Gold&Discovery Fund is long the mentioned stock, but hasn’t received any compensation from the mentioned companies. Investing in exploration companies is a very high risk play. You can loose 90% of your investment. Always invest in at least 5-10 different stocks and insure your speculative investments with a minimum of 10% in physical gold and/or silver. Recipients of this e-mail message do not receive investment reporting, investment supervisory or investment management services, nor the ongoing review or monitoring of an individual investment portfolio. The information contained in this e-mail message is intended only for the personal and confidential use of the recipient(s) named above. If the reader of this message is not the intended recipient or an agent responsible for delivering it to the intended recipient, you are hereby notified that you have received this document in error and that any review, dissemination, distribution, or copying of this message is strictly prohibited.  If you have received this communication in error, please notify us immediately by e-mail, and delete the original message. The Middelkoop Discovery Alert is an information service for investors/traders and is not a recommendation to buy or sell securities, nor an offer to buy or sell securities.  The publishers of the Middelkoop Discovery Alert are not brokers and are not acting in any way to influence the purchase of any security.  The information provided is obtained from sources deemed reliable, but is not guaranteed as to accuracy or completeness.  It is possible, at this or some subsequent  date, that Willem Middelkoop and-or his staff, partners, and/or affiliates of any or all may own, buy or sell securities presented. The Middelkoop Discovery Alert or Willem Middelkoop, are not liable for any losses or damages, monetary or otherwise, that result from the content of The Middelkoop Discovery Alert. The publishers of The Middelkoop Discovery Alert recommend that anyone trading securities should do so with caution and consult with a broker before doing so. Past Middelkoop Discovery Alert performance is not indicative of future performance.  Securities presented in The Middelkoop Discovery Alert should be considered speculative, with a high degree of volatility and risk.   Any redistribution of the above information, without prior written consent from Willem Middelkoop is strictly prohibited.

 

 

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