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Resource rally, Fortuna, and BHV de-risked

Thom Calandra
0 Comments|June 7, 2013

This now-13-cent stock is worth $1 a share

Our resources rally continues into higher territory. Oil also is rising as the USA dollar index falls 1.25 percent, as measured by the DXY. Technicians tell me if the most active gold future holds its gain, now at $1,415, Friday looks to be a follow-on day of higher prices for metals.

Bellhaven Copper & Gold (TSX: V.BHV, Stock Forum): Julio Benedetti, Paul Zweng and the Bellhaven team this week showed strong gold intercepts at new target La Garrucha in Colombia.

The key here is the 350 meter by 250 meter magnetic anomaly for La Garrucha, which is a newly acquired target at La Mina in Colombia's Middle Cauca Belt. It is easily twice the size of the anomaly used to locate targets at La Mina's Cantera and Middle Zones.

Bellhaven Copper & Gold's assay sheets show the spread of La Mina and the intercepts at La Garrucha. (Best one: 217-meters averaging 1.3 grams per metric ton of gold, with copper.) 

The best part is the anomalies: the first hole's "hit" came at the edge of the magnetics. This bodes well for further drilling -- probably 15 more La Garrucha holes in 2013 -- closer to the center of the mag showings.

Bellhaven's assay sheets are a service that every minerals prospector should be providing for shareholders and stakeholders. Sadly, few do. The four in BHV's press release this week try to put all of La Mina in context.

CEO and co-founder Julio Benedetti is getting phone calls this week about today's data and maps. Share volume this week for the Canada traded shares is off the charts.

I think that reflects that the probable addition of gold with copper ounces at La Mina, because of La Garrucha, derisks the project.

The grades for La Garrucha are intense for a porphyry, and the first hits are at shallow depths compared with other Mid-Cauca Gold Belt deposits. 

As the next several holes likely will continue to show bountiful mineralization of gold, with copper, 1,400-hectare La Garrucha and Bellhaven's neighbouring La Mina, less than a click away, likely will notch about 4 million ounces of gold. Far more, when factoring in copper credits.

La Mina, which I have toured three times now, used to be a mining town, and it will be one again. The forces behind this fresh porphyry, recently added to Bellhaven's portfolio, include Dr. Paul Zweng, whose Hawaii fund now owns more than 10 million BHV shares, co-founders Julio Benedetti and Patrick Abraham, who own or have placed in good hands more than 20 million shares, and the company Iamgold, which I believe owns about 13 percent of Bellhaven's shares and is trying to keep its percentage ownership intact.

I own almost 2.3 million shares and am in for the win.

This latest makes the porphyry among the largest new gold deposits in Colombia. We might have to wait for a resource statement for La Garrucha, something that could take another eight months. Still, there is a history of large companies purchasing prospector's assayed assets (in this case La Garrucha) before an independent resource is out.

I hold to the view that even at $50 an ounce in the ground, a bargain for any type of gold mine, and even inflating BHV's fully diluted shares to 200 million for further development, this now-13-cent stock is worth $1 a share, with a Panama spinoff. (There are other considerations, given the agreement with AngloGold Ashanti, which dealt La Garrucha to Bellhaven in the first place. Those who want a complete NPV / IRR model for a potential gold mine at La Mina, with strip ratios and everything else, the data are all at the Bellhaven Copper & Gold website; you just need to create your spreadsheet and start inputting.)

Bellhaven's principals tell me I am shooting far too low on the $50-ounce figure. And far too high on the issuing of tens of millions of more shares. But you know, a buck with a new Panama company as a spinoff sounds pretty good to me.

I am entering my fourth year on this one, and it is in part a labour of love for Colombia, and one of professional respect for Dr. Zweng; a doctor of geology and an insightful natural resources investor; for former BHV chief geologist Jeffrey W. Brooks, who is now at our TCR 8 Solvista Gold in Colombia; for businessman and geologist Julio Benedetti in Panama; for investor, company builder and banker Patrick Abraham (Panama and USA); and for Millie Paredes, who runs a tight ship as president and chief financial officer from Los Angeles, and some say runs an even tighter ship with her children, who speak English, Spanish and Mandarin.

Briefly: I sold 20,000 of my Seafield Resources shares (SFF) at a loss. I still own four to five times that amount. I look to be purchasing more shares of Solvista Gold (SZZ), one of our TCR 8, on any weakness below 40 cents. I also look to start building a stake in Fortuna Silver (below).

Solvista Gold shares are benefiting from North America coverage from Northern Miner and Mineweb Canada. The Caramanta porphyry for Solvista and La Garrucha one for Bellhaven Copper & Gold (BHV) appear to be competing for the slot of richest porphyry in Colombia's Middle Cauca Belt.

With the resource rally intact thus far these past two weeks, turbo-charged miners and prospectors, as measured by daily gains, still include: Fortuna Silver Mines (FSM in USA); B.C.'s Pretium Resources (PVG); and Ghana's Asanko (AKG). I own none of them but follow Fortuna and its family, which also runs Colombia's Atico Mining (ATY), one of our TCR 8.

I spoke with Fortuna's Jorge Ganoza, who told me he looks to boost silver (and gold) output from the San Jose mine in southern Mexico as soon as 2014. Fortuna is riding the wave of recent drilling at Trinidad North, a San Jose discovery that is showing more than 700 grams per metric ton of silver, and more than 4 grams gold over estimated true widths of 5 to 19 meters. The minerals go deep, more than 1,000 meters in some cases, and look "open" on at least two sides. 

Jorge told me on the telephone a few hours ago that he is starting to think Trinidad North could become part of a complex that ranks with the world's largest silver mines. We shall see. Mr. Ganoza has told others this as well.

Here is a snapshot of the 7 fresh holes, looking west, I believe:

That is almost all. Atico Mining likely will have El Roble assays next week.  

For the Belmont Stakes Saturday, June 8, in Queens, NYC: Just one horse, with regrets to Todd Pletcher, the trainer who has five horses in the race. (That's like prospectors who have five flavors of metals companies in their back-office filing cabinets.)

Ta-da. I think Vyjack is an excellent long-money shot in the 1 1/2-mile race; the gelding won the Gotham Stakes in NYC and has lots of early speed. Rudy Rodriguez is the trainer. Vyjack had a bad cold a few months ago. Rudy is under a cloud.

The gelding has what looks like enough closing stamina to make a run at the top of the famous Belmont stretch.

Oh yeah, full equine disclosure: Rudy R.'s barn is under surveillance -- video cameras -- because of rules infractions regarding horse drugs and stuff. Vyjack could be our Great Gatsby on Saturday. See NYC Daily News. 


Tags: GOLD

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