Seafield Resources: The Next Ventana Gold?
Seafield Resources Ltd. (TSX.V:SFF) yesterday announced a stunning drill hole result: 449 metres grading 1.29 grams per tonne of gold. With this intercept, which included a 23.95 metre segment grading 9.18 gram per tonne gold, there is absolutely no doubt that the Miraflores deposit is going to be a home run.
When the market opens later this morning, any shares you can get under a dollar will likely be ten-bagger potential, as with a few more drills holes like this one, and you’ve got Ventana 2 on your hands. (Ventana is currently the subject of a buyout offer by Brazil’s EBX Gruoup for $1.5 Billion.)
The company is drilling on the recently obtained Quinchia gold and copper project in the Department of Risaralda on the Mid Cauca porphyry corridor, where several large scale gold discoveries have been made, including the 12.9 million ounce gold La Colosa deposit owned by AngloGold Ashanti (NYSE:AU).
The Quinchia Project has already outlined an inferred resource of 776,000 ounces of gold at Miraflores. Other gold mineralized porphyries have been identified nearby at Dos Quebradas, where the company is doing detailed ground exploration to define drill targets and will begin drilling in the next several months and at Chuscal where strongly mineralized porphyry has been outlined at surface. The Chuscal project is currently undergoing legal due diligence.
The Quinchia project was obtained from a private company, Caribbean Copper and Gold Corp.
According to the company’s recent quarterly financial statements,
On April 20, 2010, Seafield announced it had finalized an option agreement with the Association ofMiners of Miraflores (“AMM”) to acquire 100% interest in the Miraflores property located in the Quinchia district of Colombia. The Miraflores property consists of a 124-hectare mineral exploitation contract and hosts the Miraflores gold deposit. AMM currently operates a small underground mine at Miraflores that produces about eight tonnes per day.
The option agreement calls for cash payments of US$1,500,000 in five payments over two years and a final option payment of US$1,500,000 within 30 months of the initial signing date. In return for CCGC facilitating the option, Seafield issued to CCGC 2,000,000 common shares of Seafield (issued and valued at $380,000) and paid US$100,000. If Seafield elects to continue with the option after the first anniversary of signing the agreement, it will issue a further 1,000,000 common shares of Seafield and pay CCGC a further US$125,000.”
Not a bad deal at all for Seafield.
This drill result comes from the 12 –hole 3,800 meter drill program that began in June and wound up at the end of October, so there could be some more spectacular intersections coming out. Not that such a fantastic hole needs to be immediately followed up with another grand slam.
The Miraflores deposit occurs within a hydrothermal breccia body and is roughly circular in shape,
measuring some 280 metres by 250 metres in outcrop. It has been traced by drilling for over 600 metres in vertical extent and remains open at depth. During the period 2005-2007, AngloGold Ashanti Limited and B2Gold Corp. completed the diamond drilling and underground sampling and were successful in delineating the significant low-grade large-tonnage Au-Ag deposit which forms the current inferred resource and is potentially amenable to bulk-tonnage mining and mineral extraction techniques.
It might be tough to get shares at under a dollar when the stock opens up later this morning – you can count on substantial and ferocious demand for these shares. But with such a big intercept, there’s no doubt there is more where that came from.
Grab all you can with both hands.
Shares Outstanding: 98,699,092
Warrants & Options: 47,972,177
Fully Diluted: 146,671,269
Market [email protected]$0.23: $22.7 million
DISCLOSURE: No beneficial interest.
James West is the publisher of the highly influential and widely respected Midas Letter at midasletter.com. MidasLetter specializes in identifying emerging companies in gold and silver exploration at the beginning of their share price appreciation curves, and regularly delivers 10 baggers (stocks that increase in value by at least a factor of 10) to his premium subscribers. Subscribe at http://www.midasletter.com/subscribe.php.
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