Friday 30th September 2016

Resource Clips


Hard to match

Has Colorado Resources been victimized by its early success?

by Greg Klein

Stepping out 400 metres from North ROK’s market-shattering discovery hole in northwestern British Columbia, Colorado Resources TSXV:CXO hit a 402-metre intercept showing 0.28% copper and 0.27 grams per tonne gold. What anywhere else might be considered typical-to-good results for a near-surface porphyry copper-gold project apparently failed to meet market expectations. The stock tanked.

Of nine holes released August 28, NR13-005 to NR13-009, along with NR13-012 and NR13-013, took 100- to 200-metre step-outs southeast from the project’s very first hole. Reported last April, the discovery showed 242 metres of 0.63% copper and 0.85 g/t gold within a 333-metre interval of 0.51% copper and 0.67 g/t gold, starting at 2 metres in depth. Of the August 28 assays, NR13-005 showed:

  • 0.22% copper and 0.34 g/t gold over 120.1 metres, starting at 115.4 metres in downhole depth

  • (including 0.38% copper and 0.62 g/t gold over 42 metres)

Hole NR13-006 showed:

  • 0.1% copper and 0.12 g/t gold over 163 metres, starting at 191.1 metres

  • (including 0.13% copper and 0.14 g/t gold over 51 metres)

Hole NR13-007 showed:

Has Colorado Resources been victimized by its early success?

Having closed a $4-million private placement in July and with permits for another 40 holes, Colorado Resources expects North ROK drilling “to continue for the foreseeable future.”

  • 0.18% copper and 0.36 g/t gold over 127.3 metres, starting at 116.2 metres

  • (including 0.25% copper and 0.52 g/t gold over 40.5 metres)

Hole NR13-008 showed:

  • 0.27% copper and 0.14 g/t gold over 189.1 metres, starting at 16.5 metres

  • (including 0.41% copper and 0.2 g/t gold over 71 metres)

Hole NR13-009 showed:

  • 0.18% copper and 0.07 g/t gold over 19.1 metres, starting at 278.4 metres

Hole NR13-012 found no significant results but NR13-013 proved the highlight of the batch. Sunk to the rig’s maximum capacity of 565 metres, it showed:

  • 0.28% copper and 0.27 g/t gold over 402.2 metres, starting at 162.6 metres

  • (including 0.33% copper and 0.23 g/t gold over 279.2 metres)

  • (including 0.36% copper and 0.23 g/t gold over 224.7 metres)

  • (including 0.41% copper and 0.28 g/t gold over 160.9 metres)

  • (including 0.53% copper and 0.37 g/t gold over 57.7 metres)

A hundred metres northwest of last April’s discovery, NR13-011 found:

  • 0.23% copper and 0.15 g/t gold over 90 metres, starting at 127.9 metres

  • (including 0.31% copper and 0.24 g/t gold over 45 metres)

True widths were unavailable. Dips ranged from minus-45 to minus-55 degrees, except for the minus-70 NR13-006, making vertical depths substantially less than downhole depths.

Holes NR13-006, NR13-007 and NR13-013 were collared 150 metres west of the main trend “and may indicate the presence of a second, parallel zone developing in this area,” the company stated. An attempt to test the Edon target, 1,600 metres southeast of the discovery, had to be abandoned for technical reasons. Further drilling will follow up.

Nevertheless North ROK’s strike now extends 500 metres along a 1,200-metre magnetic high trend with mineralization open in both directions and at depth.

In a statement accompanying the release Colorado president/CEO Adam Travis pointed out the company had, “in a mere four months,” drilled nearly 6,000 metres with average grades over 0.3% copper and 0.37 g/t gold in over 1,800 metres of mineralized intercepts. Yet the stock was slipping even before the assays were released.

Having traded the previous week in the 69- to 77-cent range, Colorado closed August 27 at $0.70, a nickel below the day’s high. Colorado opened August 28 at $0.60, then closed on $0.43, the lowest point since the first hole was announced on April 25.

But with “strong cash reserves, the company expects drilling to continue for the foreseeable future,” the news release stated. Colorado closed a $4-million private placement in July. More recently, B.C.’s Ministry of Energy, Mines and Natural Gas has permitted another 40 holes beyond the current campaign, which is expected to finish within weeks.

The 5,188-hectare North ROK sits on a provincial highway about 15 kilometres northwest of Imperial Metals’ TSX:III Red Chris copper-gold mine, scheduled for commissioning in May 2014. With a truly impressive first hole in the neighbourhood of a development project, Colorado’s April discovery drew several other companies into a hectic area play. Read more here and here.


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