Colibri Resource Corp – A 30 Hole Drill Program is Underway

Palisade Research April 28, 2018
Category: Research

 

 

In August 2017, Colibri Resource Corp (CVE: CBI) closed a transformational acquisition of Canadian Gold Resources, a private company that owned 100% of the Pilar gold project, located near Suaqui Grande, Sonora, Mexico.

 

Company Snapshot

Current Price: C$0.095

Shares Outstanding:  52.7 million

Market Capitalization: C$5.0 million

Cash: ~C$0.8 million

 

The transaction saw the issuance of 24.2 million shares for an equivalent price of C$4.0 million  – and in exchange Colibri received a new flag-ship project.

The advanced stage Pilar gold property has had small Scale, high-grade mining dating back to the early 1900s.

In modern times, the property has seen extensive exploration, including geophysics, sampling (1.9 kilometers of 3-meter channel sampling and ~200 rock chip samples), drilling (~14,700 meters), and trenching (750 meters).

Colibri currently estimates that the Main Zone (in-house, non-compliant) contains 43,000 ounces of gold with an average grade of 1.9 g/t Au.

In the most drilling campaign, Pilar yielded attractive, near surface holes, including:

59.1 meters of 0.58 g/t Au – from surface

41.0 meters of 1.31 g/t Au – from surface

3.0 meters of 3.4 g/t Au – from 56.39 meters downhole; and

21.3 meters of 0.84 g/t Au – from 15.2 meters downhole

66.0 meters of 0.94 g/t Au – from 39.0 meters downhole; and

1.5 meters of 7.36 g/t Au – from 91.5 meters downhole

 

Pilar will be an open-pit mine with heap-leach potential. Three preliminary metallurgical tests have yielded recoveries of up to 92.17% in gold and 28.66% silver.

Pilar is very comparable to Argonaut Gold’s  La Colorada Project – only 50 kilometers away. It hosts several gold deposits located near the historic mining town of La Colorada, Sonora, Mexico.

Today, La Colorado hosts a reserve of 398,000 ounces averaging 0.66 g/t, and an indicated resource of 568,000 averaging 0.79 g/t.

Like Pilar, La Colorada was a historical mine and currently operates as a heap leach operation.

And also like Pilar, La Colorado was majority drilled with RC drilling.

Colibri’s current drill program will see up to 30 RC holes, designed to confirm modelling and extend the known mineralization of the Main zone to the northwest and southeast along trend.

In the past, it was assumed that the main NW/SE fault structure at the centre of the gold mineralization was a strike-slip fault, and the North Hill mineralization is a right-lateral extension of the South Hill mineral.

However, recent results indicate that mineralization actually extend into North Hill crossing the strike-slip fault to the NW.

This might indicate that there is actually no strike-slip movement, but rather there are two separate parallel fault-zones containing gold mineralization. If this is proven, this will allow for significant potential for additional ounces of gold at the Pilar project.

Colibri has an exciting exploration project located just north of Pilar in, the Evelyn Gold Property.

Evelyn is located 30 kilometers from Fresnillo’s La Herradura Gold Mine, which produced 520,000 ounces Au in 2016, at an average grade of 0.71 g/t Au at a cost of $470/oz.

Also in close proximity is Industrias Penoles’ Noche Buena Gold. The mine produced 160,000 ounces in 2015. Lastly, Evelyn is on strike with Alamos Gold’s El Chanate Gold Mine, which produces 80,000 ounces per year.

The Evelyn Gold property is littered with artisanal placer mining activity, but there has only been limited soil and rock chip sampling to date.

The sampling has been limited to a very interesting outcrop, which sits 80 meters long and 7 meters wide. Initial results yielded grades ranging from 0.5 to 26 g/t, averaging 10 g/t. Colibri plans on running a geophysics survey to see how big this potential target actually is.

Colibri’s last high-impact project is the Pitaya Property, currently JV’ed by Agnico Eagle (signed February 28, 2011), who has spent US$4.3 million in exploration to date.

Agnico currently owns 66.4% and can earn up to 75%. The terms require Agnico to spend a minimum of US$3 million over the first three years and complete a positive feasibility study within five. In addition, Agnico is required to make option payments totalling US$1.5 million over a seven-year period. To date, Agnico has spent US$4.3 million and Colibi C$2.5 million before the JV, for a total of ~C$8.0 million in total exploration.

The Pitaya Property is along-strike from the low-grade and low-cost La Herradura, Soledad Dipolos, Noche Buena, and El Chanate mines and deposits which in aggregate contain over 10 million ounces of gold. It is also adjacent to Fresnillo ́s new Tajitos discovery which currently contains ~460,000 ounces and growing.

Agnico is currently waiting on the results from last year’s exploration campaign before deciding its plans for 2018 and beyond.

Colibri offers enormous upside potential with a current market cap of only $5 million. We appreciate the fact that Pilar can be fast-tracked to production, bootstrapping the operation, meaning less dilution and a lot more exploration. It definitely helps that the management team is experienced in Sonora, with a track record of putting mines into production.

The company recently closed a financing and has $800,000 in cash to utilize. Phase 1 drilling at Pilar will see 3,000 meters of drilling and 30 holes. This means near-term catalysts and the possibility of real stock moving events.

 

Palisade Global Investments Limited holds shares of Colibri Resources Corp. We receive either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate. The information contained in such write-ups is not intended as individual investment advice and is not designed to meet your personal financial situation. Information contained in this report’s from sources we believe to be reliable, but its accuracy cannot be guaranteed. The opinions expressed in this report are those of Palisade Global Investments and are subject to change without notice. The information in this report may become outdated and there is no obligation to update any such information. Do your own due diligence.

 

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