Oro Verde (ASX:OVL) and major gold partner Newcrest Mining (ASX:NCM) have begun an aggressive exploration program to find a substantial gold deposit in the South American nation of Nicaragua.
In the sights of the farm-in between the companies is potentially a multi-million-ounce, high-grade epithermal gold deposit at Topacio in the country’s south-east. There are at least four other multi-million gold deposits in Nicaragua, which has a renewed reputation as one of the safest countries in South America.
The plan is to build upon a historic resource of more than 340,000 ounces of gold through an intensive program which includes mapping and sampling, airborne geophysics (magnetics and radiometrics) along with concession-wide 400 metre by 400 metre grid soil sampling program.
In terms of the farm-in agreement executed in November 2015, Newcrest must spend at least US$500,000 within the first 12 months, after which it may earn up to 75% by sole funding a total of US$7.9 million, while Perth-based Oro Verde will continue to manage the exploration program during the farm-in period. Results from this program are expected to produce a strong news flow for both Oro Verde and Newcrest
The managing director of Oro Verde, Trevor Woolfe, said funding from Newcrest had accelerated the search for a multi-million ounce gold discovery at Topacio.
“A Newcrest consultant, expert in epithermal gold deposits, recently completed his initial field mapping program and is currently analysing the data for likely sources of the high-grade mineralised fluids.
“The targeting studies will be augmented by a systematic soil sampling program and an airborne geophysical program that is in the advanced stages of planning,” Woolfe said.
Oro Verde is managing the project until Newcrest has earned its 51% interest in the joint venture, taking advantage of the existing team, contacts, local knowledge and infrastructure that the company has established in the Managua Department of Nicaragua.
Analysis
The key objective of the Oro Verde-Newcrest partnership is to identify highly prospective vein, alteration, geochemical and structural targets for drilling in the second half of 2016.
That Newcrest has said it could accelerate exploration to define a mineralised system and host to a gold deposit containing at least two million ounces at Topacio is indicative of the potential perceived in the project.
Generation of drill targets will provide strong forward catalysts.
There is near term news flow ahead as Oro Verde will kick off a soil sampling program this week across the Topacio concession on a 400m x 400m grid using Newcrest's pathfinder geochemistry to define drill targets.
The five main areas of initial focus within the 93 square kilometre concession are Topacio Resource Area, Topacio Veins, Buena Vista, El Sahino and Cerro Tortuga.
The project already contains a historical Canadian NI 43-101-compliant inferred resource of 2.7 million tonnes at 3.9 grams per tonne gold, for 340,345 ounces of gold, at 1.5 g/t gold cut-off.
Newcrest has a strong track record of discovering major deposits over the past 15 years, including the discovery of deposits at Cadia Hill, Cadia East and Ridgeway in New South Wales, the Gosowong deposits in Indonesia, O’Callaghans at Telfer in Western Australia and, in more recent times, the Golpu discovery in Papua New Guinea.
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