Ann: Thick intercept of gold from surface at Tesorito Porphyry, page-240

LCL

Huge Statement from the Warrick Grigor Founded Far East Capital

Los Cerros at the inflection point; THIS IS BIG....

Last week we highlighted Tesoro Resources (TSO) following the release of a huge intercept of 231m at 0.83 gpt at its El Zorro gold exploration project in Chile.

This week we see that Los Cerros (LCL) has trumped that with 230m at 1.0 gpt at its Tesorito gold exploration project in Columbia. We now have two companies with very exciting, large scale gold projects in South America on our watch list.

Recall that Los Cerros has emerged from the ashes of Metminco. It has a reserve of 456,000 oz at 3.29 gpt that was judged to be uneconomic when modelled at US$1,300/ oz.

Maybe this can still be worthwhile developing if the gold price keeps going higher and some better grade open pittable ore is identified to boost cash flow returns in the first couple of years, but there is now a much bigger story that will drive the share pice. Click here for our commentary on Los Cerros, in the Weekly of 29 August.

Los Cerros’s first diamond drill hole, TS-DH08, returned 230m at 1 gpt from surface, including 116m at 1.38 gpt from 114m (down hole).

This is now the third hole to exceed an intercept of 230m at 1 gpt, over an area of 300m x 250m and open in all directions. Previous holes returned 384m at 1.01 gpt and 253m at 1.01 gpt.

There is something very large here, but how big could this be? Taking the dimensions above to a depth of 300m, and applying a specific gravity of 2.7, we can come up with a back-of-the-envelope number of 2 Moz at 1 gpt. That is just for starters.

As stated above, the zone of interest is open in all directions.

The identification of bornite copper mineralisation is an interesting new development as it suggests there could be a copper-rich resource at depth.

Whether this has come from a separate pulse of mineralisation from the depths is open to conjecture, but this is entirely possible.

If so, then

have a look at AngloAshanti’s Nuevo Chaquiro project to the north of Tesorito, which extends to a depth of 800m vertical. This contains 602 Mt with 7 Moz at 0.37 gpt gold and 0.73% copper (about 30 Moz gold equivalent).

We are not saying that Tesorito will provide us one of these, but it is not beyond the realm of possibilitiy.

These large ore systems take a good while to drill out so the news flow will keep coming for an indefinite period.

Hole TS-DH09 is currently drilling 200m north of TS-DH08, and then it will return to the south to continue testing the higher-grade porphyry core both laterally and at depth. This is the inflection point that will lead to a re-rating of the company.

We know with confidence that we are dealing with something very substantial here, something that will continue to grow with continued drilling.

The market can obviously see the potential, given that on the day of the announcement the shares jumped 127% to 17¢, on turnover of 77 million shares.

http://www.fareastcapital.com.au/imagesDB/newsletter/WeeklyComm12September2020-2.pdf