Categories: Precious Metals
Topics: General Precious Metals

Ventana Gold’s Gathering Steam

 By James West
MidasLetter.com
Friday, June 5th, 2009

Public companies have a good week once in a while, but every so often they have a week that changes the landscape for their shareholders significantly and permanently. This past week was one of those for Ventana Gold Corp. (TSX:VEN), and the events that unfolded back to back this week point to a much greater future for the Canadian exploration company.

It kicked off with the announcement by Lumina Captial, controlled by Vancouver mining entrepreneur Ross Beaty, that Lumina had gained a 16.9 % controlling interest in Ventana through the acquisition of an additional 2.25 million common shares in the open market. Ventana has 80.3 million shares outstanding.

Ross Beaty, founder of Pan American Silver and 4 copper companies that sold for a total of $1.2 billion, is one of Canada’s most successful mining investors.

The second even this week that cause the market to wake up to what Ventana has in store was the announcement by TD Waterhouse of its buy recommendation on Ventana shares, citing a CA$4 per share price target.

According to the report: “Ventana is a gold exploration and development company that was listed in November 2008. The company has a portfolio of properties in northeastern Colombia. Its flagship La Bodega project covers 2.2 km of the southwestern strike extension of the fault zone which hosts the 15 million ounce (mm oz) Angostura Gold Project of Greystar Resources Ltd. (GSL-T; not covered) on the adjacent property.

To date, 109 shallow drill holes have tested half of this strike length and have returned broad intervals of moderate and high grade gold mineralization. We calculate conceptual resource estimates of 1.1mm oz grading 3.4 g/t and 3.2mm oz grading 8.8 g/t in the La Bodega and La Mascota zones, respectively.

We believe this justifies the construction of a concurrent openpit/ underground mining operation with combined throughput of 10,000 tonnes per day. This generates 490,000 oz per year at total cash costs of US$239/oz over a seven-year mine life in our model. More importantly, we believe the potential exists to multiply these resources with further drilling down-dip and along strike to the southwest of La Bodega and La Mascota where both zones are open.

We are initiating coverage with a Speculative BUY recommendation and $4.00 target price, based on 0.8x NAV5% using US$800/oz gold.”

As if that wasn’t enough to whet the appetites of investors sitting on the sidelines, the company followed up this news with spectacular drill results from the ongoing program now underway.

Two drill holes were reported, which were drilled in the southwest portion of La Mascota to test the down-dip extension of mineralization and have confirmed that potentially economic grades and widths extend to at least 250 metres down-dip over a tested strike length thus far of 325 metres. Both holes also encountered additional mineralized zones in the footwall of the main structure, further enhancing the potential to expand resources.

The assays for these two holes came back with a stunning 94.5 metre intercept grading 5.83 grams per tonne gold in hold 112, and 8 metres grading 17.54 grams per tonne gold.

From hole 110, other intercepts included 38 metres of 5 grams per tonne gold, 9 metres of 13.04 grams per tonne gold, and 19.2 metres grading 3.88 grams per tonne gold.

There is a lot more upside potential yet in Ventana, and the company also announced its plans to add an additional 3 drills to the property, bringing the total number of operating drills to 6.

And to top off the week of positive developments, the company announced the addition of Robert Perooz to its board of directors.

Pirooz is General Counsel for Pan American Silver, a leading silver producer with seven operating mines in Peru, Mexico and Bolivia.

Company Website: www.VentanaGold.com.