Aguia reveals high-grade copper/gold project Last Monday Aguia gave its El Dovio Project its first public outing with a rather technical release that went deeply into the geology. The previous owners of the project, Canadianlisted Newrange Gold, had interpreted El Dovio as a VMStype system. However, on deeper analysis, it appears to be an orogenic lode gold style of mineralisation with the later injection of copper and zinc mineralisation. Geologists may revel in the detail of the release, but for the average investor all you need to know is on the first page. There have been 34 drill holes to date with some of the better intercepts being; • 2.1m at 15.60 gpt Au, 20.3 gpt Ag, 2.24% Cu & 2.1% Zn • 6.85m at 5.68 gpt Au, 5.89% Cu & 1.3% Zn • 2.60m at 9.36 gpt Au, 5.16% Cu, 30 gpt Ag & 0.5% Cu The orebody has been exposed via an adit that returned channel sampling results of; • 21m at 9.18 gpt Au, 2.45% Cu, 15.1 gpt Ag & 2.0% Zn. Trenching near the tunnel portal returned true widths of; • 6m at 13 gpt, 5.9% Cu, 43 gpt Ag and 1.4% Zn, and • 45m at 5.6 gpt Au, 0.5% Cu, 6.8 gpt Ag and 0.4% Zn. Metallurgical test work on a 53 kg bulk sample has shown excellent recoveries of 96.4% for the gold, 97.8% copper, 91.1% silver and 96.8% zinc. These would report to a concentrate. The significance of the news While the assays are from historical drilling and sampling, this is all new information to the Australian market. It had not been released previously by Aguia. The project was acquired as part of the Andean Mining portfolio that came with the takeover of that company. It has taken some time to come up with the verification of historical results, to the satisfaction of the ASX, but it is now compliant with Chapter 5 of the ASX Listing Rules. Aguia has been concentrating on getting the Santa Barbara Gold Project up and running as it is the lowest cost and fastest route to securing a cash flow. El Dovio is a larger project requiring much more time and money. The 34 drill holes give confidence that we are dealing with a high- grade polymetallic system, but there needs to be many more holes drilled before we can draw numbers around it. Nevertheless, looking beyond the higher grades reported we can say the grades could potentially be 3% Cu and 5 gpt Au (subject to a lot more work). There is a strong feeling that we are looking at something similar to De Grussa orebody that took Sandfire to a $2bn market capitalisation. To say that this is a second string project would almost be an insult, given its potential, but you can say it is the second cab off the rank in Colombia. How should the market react? The market will react to news flow in many different ways depending upon many different factors, so direct comparison of one project to another isn’t necessarily advisable, but it can be interesting. Let’s look at the El Dovio numbers and compare them with the drill results from Australian Copper and Gold at its Cobar Project. Back in May AGC reported these intercepts. Hole # 30 - 5m at 16.9 gpt Au and 1,473 gpt Ag, from 112m Hole # 32 - 8m at 1.0 gpt Au and 502 gpt Ag, from 131m, Hole # 31 - 4m at 0.17 gpt Au and 545 gpt Ag, from 123m. It was written up as a great discovery. The market reacted very strongly, taking the share price from 12¢ to 61¢ in short order and the market capitalisation to $135m. The turnover in the market in each of the two days subsequent to the news was almost $4m. Contrast this performance with that of Aguia on the El Dovio release. The shares rose a modest 5% on the day, on turnover of about $85,000. That suggests it is still flying under the radar with a market capitalisation of only $53m … and other, more advanced projects.
WG today
AGR Price at posting:
4.0¢ Sentiment: Hold Disclosure: Held
