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?

1 comment:

Anonymous said...

you would be wise to credit the owner of the document.

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