High grade gold in soil sampling

Published 08-NOV-2022 12:52 P.M.

2 min read

Our junior gold exploration Investment, Los Cerros (ASX:LCL) opened 20% higher this morning on news of high grade gold hits from soil channel sampling at the Dosquebradas gold/copper porphyry, which is part of LCL’s Quinchia Gold Project in Colombia.

The 2.6Moz Quinchia Project comprises a cluster of porphyry and epithermal gold/copper targets within a 3km radius, including Dosquebradas which has an existing Inferred Resource of 0.46Moz grading 0.71g/t gold.

Today’s higher grade surface sampling results include:

146.6m grading 1.82g/t gold, including 34m @ 4.22g/t gold, and
40m grading 2.16g/t gold

We like that LCL suspects that these results could enhance the Dosquebradas Resource grade near surface.

Additionally, results from deeper (3+ metre) auger samples were reported, including 9.28g/t gold and 5.68g/t gold.

Both the channel sample results and the auger samples are from a zone of sparse drilling beyond the historical 0.5g/t gold envelope defining the Dosquebradas Resource, suggesting potential extensions to surface of the current high grade resource envelopes.

LCL intends to integrate this new target area into the ongoing Quinchia Project geological review, which is targeting high grade resources proximal to those resources included in the ongoing Preliminary Economic Assessment (PEA) investigations.

What’s Next?

We now await word that the Preliminary Economic Assessment (PEA) has commenced. As mentioned in our LCL Investment Memo, the PEA — which is similar to a scoping study — will provide a clearer indication of what returns could be expected should the project be commercialised.

Trading in LCL shares (and broadly across listed companies focused in Colombia) have fallen significantly since the Colombian election of President Gustavo Petro earlier this year, given his pre-election stance for higher taxation of select natural resources sectors.

We are watching to determine whether the new government will actually commit to those policies, noting that it has already softened its stance by abandoning a proposed 10% export tax on gold companies.