Sunday, May 31, 2009

Unlocking the Oro Gold Story

When Darren met with Wendell Zerb and the analysts at Canaccord last week that resulted in Canaccord buying several hundred thousand shares over the next few days, you have to wonder what dots they connected to buy in the $.75-$.80 range. Was it just the 200,000 ounce current resource at around 1.5 g/t that we now know has been understated and probably is more in the 600,000 ounce range at 5 g/t? This resource is confined to a relatively small 200-300 meter area. Is this what Canaccord got all excited about? Probably not.

Just like I connected the dots when Oro Gold was at $.18 when no one cared, Canaccord is connecting the dots at $.75-$.80 when none of the other inistitutions care. What dots are those?

We know that hole #20 which is 200 meters south of the discovery zone is showing visual signs of the breccia that is present in the high-grade discovery zone. Assays are pending and will most likely be released in the next 7-10 days. If the assays show the same type of grades, the resource area may be twice as large as the current one under the 43-101. Is that what got them all excited?

We know that 400 meters north of the north end of the discovery zone (see picture on the current presentation here) is the Bocas discovery which there is a 11 g/t gold large boulder at surface that appears to be made of the same type of breccia that has been discovered in the high-grade discovery zone 400 meters to the south. They also trenched 63 meters of 3 g/t in this zone (sound familiar?). Does the high grade breccia material run 400 meters north to Bocas thereby doubling again the size of the deposit? Has Canaccord connected those dots?

We know (maybe one or two of us anyways) that 1 kilometer (1,000 meters) to the south of the high grade discovery zone and along strike is the Colinas discovery. Not much has been said about this zone since no core drilling has been done yet like that in the high grade zone, only RC drilling. We know that the RC drilling has been understating the high grade breccia zone by 3-4 times when compared to the core drilling. A few of us know that RC hole 08-TRRC-016 drilled in late 2007/early 2008 hit two zones at the same depth as these last few discovery holes of 26 meters of 1.14 g/t from 128-154 meters and 14 meters of 1.98 g/t from 182-196 meters. Taken together, this RC hole showed 40 meters of about 1.5 g/t on average. Since the RC holes were underestimating the grades by 3-4 times, it is possible that when they put a core drill down this zone (Darren plans to do just that), it may show a hole of 40 meters of 5-6 g/t gold (sound familiar)? Did Canaccord connect those dots and is that what got them all excited? Will other institutions connect the dots?

If (and it is an "if" until core drilling confirms this) this high grade breccia zone runs from Bocas in the north through the discovery zone at Taunus down to Colinas in the south, you are looking at some 1,700 meters on strike of high grade breccia (or for those stateside about 1 mile long). Is that what got Canaccord excited and led them to compare the Oro Gold geology to the 14 million ounce Fruta Del Norte discovery?

Have you connected these dots?

Wednesday, May 27, 2009

canaccord compares OGR breccia to Aurelian 14 million ounce deposit breccia

Oro Gold (OGR-V)

Canaccord Adams Senior Mining Analyst Wendell Zerb highlights that the
best intersection of eight core holes thus far is: 8.5 g/t gold over 61 m, a
strong indication the RC drilling was understating the grades. The company
has released a handful of further encouraging drill results in the past week.
Based on results to date, the Taunus zone appears to be about 350 m on
strike, up to 50 m wide, and has been tested vertically over about 70 m. It
appears to be open in all directions. Recent work by Oro Gold suggests a
regional northwest-trending corridor could represent an extensional pull-apart
basin. Some specifics relating to the extensional setting are that
breccia/conglomerate units host mineralized clasts and a later higher-grade
mineralized matrix. This could be an indication of multiple mineralizing events
possibly associated with a long-lived extensional environment. Zerb notes
that the 14-million-oz Fruta del Norte deposit (of Aurelian fame – now Kinross
(K)) has been interpreted to be associated with an extensional pullapart
basin environment.

Oro Gold drills 60.6 m of 3.4 g/t Au at Trinidad

Oro Gold drills 60.6 m of 3.4 g/t Au at Trinidad

2009-05-26 09:53 ET - News Release

Mr. Darren Bahrey reports


Oro Gold Resources Ltd. has released gold assay results received for two more diamond drill holes that twinned previous reverse circulation (RC) holes at the Taunus target on its Trinidad gold property near Mazatlan, Mexico.

09TR016, a core twin drilled in the new discovery zone at Taunus, intersected 5.2 grams per tonne gold over 36.5 metres (from 160.9 to 197.4 metres) within a larger interval of 3.4 grams per tonne gold over 60.6 metres (from 160.9 to 221.5 m). The recovery of the mineralized intervals was 80 per cent and 75 per cent respectively.

09TR017A, a core twin located south of the Taunus pit, which targeted a satellite near-surface gold anomaly, intersected 1.0 gram per tonne gold over 4.3 metres (from 41.1 to 45.4 m). The recovery of the interval was 75 per cent.

Oro Gold has now completed five core twin holes. The results of these core holes confirm RC drilling has been under-reporting the gold grade of the mineralized zones. A comparison of the core versus RC assay results in the higher grade mineralized intervals is summarized in table. Further drilling of twin holes is not planned in the current drill program.

The diamond drilling is focused on expanding and defining the limits of the high-grade new (breccia) zone. To date, eight diamond drill holes have been completed in the new zone, with four of them twins (08TR012/13/14 and 09TR016) and the other four step-outs (09TR015/18/19/20).

The step-out holes 09TR018, 19 and 20 extend the new zone to the south along strike 20 metres, 50 metres and 200 metres respectively. There is visual indication in the core that the mineralized breccia zone continues to the south and appears to be between 10 and 40 metres wide. The drilling has now tested this zone over a 350-metre strike length and down to a depth of 200 metres below surface. The spacing between the diamond drill holes range between 20 to 100 metres. The current interpreted dimension of the breccia zone is 350 metres long, 70 metres vertical, and 10 to 50 metres wide, and is still open in multiple directions. The high-grade portion of the mineralized breccia material is averaging above five grams per tonne gold. Assays are pending for 09TR018, 19 and 20. The next step-out holes will be determined based on assay results for these holes.

The location of the diamond drill holes with reference to the breccia zone can be viewed on a plan map at the "Latest Trinidad Drilling" link on the Oro Gold website. Also a summary table of the high-grade gold assay intervals in the diamond drill holes completed to date in the new zone as well as core photos can be viewed at the same page.

The objectives of the continuing diamond drill program are (i) to confirm by twinning holes that the gold grade of mineralized zones at the Taunus target is much higher than what has been reported in RC holes, and (ii) to define and expand the new high-grade breccia zone discovered by Oro Gold. Meeting these objectives is expected to have a positive impact on the company's reported National Instrument 43-101 inferred oxide gold resource of 200,930 ounces contained in 4.5 million tonnes at an average grade of 1.4 grams per tonne gold, based on a 0.5-gram-per-tonne cut-off. This resource estimate was released in July, 2008, and it does not include the high-grade gold results from the diamond drilling.


Core hole From To Interval Gold Distance
(m) (m) (m) (g/t) (m)*
08TR012** 151.0 212.1 61.1 8.5 8.0
08TR013 147.0 180.6 33.6 3.8 4.0
including 160.9 168.2 7.3 15.8 12.0
08TR014 106.2 114.0 7.8 5.3
and 131.0 138.0 7.0 9.7
09TR016 160.9 221.5 60.6 3.4 10.0
including 160.9 197.4 36.5 5.2

RC hole From To Interval Gold
(m) (m) (m) (g/t)

08TRRC023 148.0 212.0 64.0 1.5
08TRRC025 150.0 180.0 30.0 3.3
including 162.0 172.0 10.0 8.5
08TRRC029 96.0 102.0 6.0 2.2
and 122.0 130.0 8.0 1.8
08TRRC040 166.0 266.0 100.0 1.6
including 182.0 214.0 32.0 3.0

*Distance in metres between centres of mineralized intersections in
the corresponding core and RC holes; some of the distances are approximate
due to lack of down-hole surveys.
**Drill hole abandoned for technical reasons.

The Taunus gold target is interpreted as an oxidized low to intermediate sulphidation epithermal vein system. The mineralization is characterized by multiphase stockwork veining and hydrothermal brecciation hosted in a clastic unit, quartz feldspar porphyry intrusive and andesite volcanics.

It is important to acknowledge that there is significant exploration potential in the Trinidad district, as the company has identified 10 other gold targets with several of them having a similar footprint to Taunus and have yet to be drill-tested. Oro Gold's technical team is interpreting this district to be situated in a northwest trending structural corridor that extends for at least 80 kilometres formed by active deep-seated major fault structures. There is evidence of this in the recent drilling based on intersecting a thick clastic and conglomerate sequence that has a vertical profile exceeding more than 250 metres in depth. The Taunus deposit is interpreted to be hosted in a local pull-apart basin within this trend.


1) Grade 2) Expansion 3) Geologic
Drill hole Area confirmation model Main result

08TR012 New zone Indicated higher 8.5g/t gold over 61.1m in
hrade new zone breccia and clastic unit

08TR013 New zone Confirmed 5.3 g/t gold over 23.6m in
higher grade breccia and clastic unit
new zone

08TR014 New zone Confirmed 9.7 g/t gold over 7.0m and
higher grade 5.3 g/t gold over 7.8m in
new zone breccia and clastic unit
09TR015 New zone Confirmed 5.3 g/t gold over 66.0m in
higher grade breccia and clastic unit
new zone
09TR016 New zone Confirmed 5.2 g/t gold over 36.5m in
higher grade in breccia and clastic unit
new zone
09TR017A SW pit Did not confirm 1.1 g/t gold over 4.4m
satellite zone grade in satellite
09TR018 New zone Defined new Assays pending
zone Hydrothermal and tectonic
09TR019 New zone Defined new Defined W pit Assays pending, breccia
zone stratigraphy and clastic unit
09TR020 New zone S Extend new Defined W
expansion zone 100m S pit In progress
and at depth stratigraphy
09TR021 Pending Definition and Geologic Pending
09TR022 Pending Possible Geologic Pending
09TR023 Pending Possible Geologic Pending

Wednesday, May 20, 2009

Oro Gold drills 42.5 m Au of 7.6 g/t at Trinidad

Oro Gold drills 42.5 m Au of 7.6 g/t at Trinidad

Hole #1 was drilled with 2 primary objectives, both which were wildly successful:

1. To de-risk the play. The discovery hole in Oct 08 of 61M of 8 g/t was a core hole in between two RC holes of approx 100M of 1.5 g/t. The risk was that the discovery hole may have hit a thin vein of high grade gold and that the rest of the deposit was more in the 1-1.5 g/t grade which is what the 43-101 is based on. As you can see in the map of the drill holes, hole #1 was drilled vertically to cut across several of the RC holes at different angles and the high grade gold was still achieved throughout the 40-60 meter length. This essentially de-risks the play.

2. A larger drill core was used in this round of drilling to prevent losing holes short of their intended depths as was the case late last year. The drilling so far, although slow, has been successful.

Now that the discovery has been de-risked, we go after increasing the deposit size. The second hole (#16 with assays to be released next week) is according to the press release:

Diamond drill hole 09TR016, a twin of RC hole 08TRRC040 (1.62 g/t gold over 100 metres), is located on the same section and approximately 20 metres below hole 09TR015. Geological logging on 09TR016 indicates mineralized material very similar to what was observed in diamond drill holes 08TR012 and 09TR015 over a comparable interval. The objective of the second hole is to confirm higher gold grades in the deeper part of the new zone.

This second hole, although a twin, will show if the higher grades exist deeper in the deposit. The RC showed 1.62 g/t. This hole should show grades significantly higher. It appears the mineralization goes for 100 meters in this core hole and if we get 5 g/t over 100 meters, the share price will move north of $1.00.

The third hole steps out a very long 500 meters to test a near surface anomaly.

The fourth and fith holes will start stepping out and going deeper than the first two holes to see if indeed this is a monster.

The next few months will be exciting to say the least. My recommendation was to sell 1/3 or 1/2 on the news but this is not yet the news that will cause a buying panic and therefore I haven't sold a share (although many did and locked in a nice profit). The best is ahead of us.


Sunday, May 17, 2009

Follow the money..........Paulsen & Co. goes all in

Two years ago he made billions shorting the real estate market. Now he will make billions in the gold and gold equities market. The 13-F filed Friday is incredibly bullish for the precious metals. The bloomberg article highlights just some of his purchases.

Paulson’s Hedge Fund Bought Gold Stock, Miners in First Quarter

By Katherine Burton

May 15 (Bloomberg) -- Paulson & Co., the hedge-fund firm run by billionaire John Paulson, increased its investment in gold and gold-mining shares in the first quarter, according to a regulatory filing.

As of the end of the first quarter, Paulson was the largest holder of SPDR Gold Trust, an investment fund that buys gold bullion. The New York-based firm owned 8.7 percent of the fund, valued at $2.8 billion as of March 31, according to a filing with the U.S. Securities and Exchange Commission.

That position was established as a hedge, the company said in a statement, because its funds have a share class that is denominated in gold rather than in dollars or euros.

Paulson bought or added to several gold companies in the quarter as well. He purchased a 15 percent stake in Market Vectors Gold Miners ETF, a fund that mirrors the move in the Amex Gold Miners Index. That stake was worth $638 million at the end of the quarter.

Paulson also bought a 2.6 percent of Gold Fields Ltd., becoming the fourth-largest holder of the Johannesburg-based gold miner.

The investment firm, which manages $26 billion, also bought an additional 2.4 million shares of Kinross Gold Corp. Paulson owned 4.4 percent of the Toronto-based gold producer and was its third-largest holder at the end of the quarter.

Paulson reported owning an 11.3 percent stake in AngloGold Ashanti Ltd., also based in Johannesburg, in March.

Armel Leslie, a spokesman for Paulson, declined to comment.

Paulson’s largest fund, the Advantage Plus Fund Ltd. returned 4.8 percent through April.

Money managers who oversee more than $100 million in equities must file a Form 13F within 45 days of each quarter’s end to list their U.S.-traded stocks, options and convertible bonds. The filings don’t show non-U.S. securities or how much cash the firms hold.

To contact the reporter on this story: Katherine Burton in New York at

Last Updated: May 15, 2009 15:58 EDT

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