Might as well post the report Successful gold prospector Cortona...

Might as well post the report

Successful gold prospector Cortona Resources Ltd (CRC) has seen its share price shrink from a high of 28¢ over the past 12 months to a low of just 6.5¢, followed by a recovery to close at 15¢ last week.

At that price the company’s 91 million shares carry a market capitalisation of $13.65 million, with net cash at the end of the December quarter of $2 million and an update due at the end of this month.

I understand Cortona’s managing director, Peter van der Borgh, plans to deliver a promotional paper to investors at the Sydney Mining Events talk fest on April 21, to be followed next month by a broker/media tour of its principal project 60 kilometres east of Canberra. This will very likely be a prelude to a further capital raising, which the board would, no doubt, hope to do at prices north of their current level.

Cortona holds exploration tenements totalling 700 square metres over the historic Majors Creek alluvial goldfield east of Canberra. It was the richest alluvial goldfield in NSW and yielded 1.25 million ounces to the early diggers. Within the 100%-held project area is the Dargues Reef shallow underground mine, operated between 1870–91 and 1914–16 to a maximum depth of 70 metres.

Cortona has so far established an indicated and inferred resource of 1.44 million tonnes grading 6.2 grams to the tonne (gm/t) – 268,000 ounces contained gold with a 2 gm/t low cut – contained predominantly within the Dargues Reef main lode. Lode widths range from three metres to 20 metres, with best intersections up to 12 metres at 11 gm/t.

Continuing drilling is targeting multiple lodes of high-grade granodiorite-hosted gold mineralisation, particularly in the adjacent Plums lode, with further results awaited. (Granodiorite hosted means held in granite diorite rocks.)

The company also has some valuable but non-core assets in Western Australia, about 45 kilometres from Kalgoorlie: Wombala Pit (inferred resource of 304,000 tonnes at 2.7gm/t for 26,800 ounces) and Wombola Dam (indicated and inferred resource of 557,000t at 3 gm/t for 53,500 ounces).

Cortona’s shares weakened last week after it announced an option with Barrick Kanowna Ltd, a wholly-owned subsidiary of Barrick Gold Corp, had expired on March 31 without being exercised. Under the lapsed option, Barrick was to mine, haul and treat the Wombola ore providing some early cash flow to Cortona.

The good news in a way is that with the rise in the gold price since the option was taken out, Barrick decided it was worth using its own spare capacity to treat its own more marginal ores. Discussions are continuing with other treatment plant operators to exploit those deposits.

Any deal from those talks, plus next week’s talkfest and the following planned investor/media tour, and more drilling results yet to come from Dargues Reef, should be positively reflected in Cortona’s share price. At yesterday’s (Tuesday’s) gold price of $US894 an ounce and an exchange rate of US73¢, the Australian dollar gold price was still a robust $1222.