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Continental reports visible gold and U$25M investment by Eric Sprott

Emerging Colombian miner Continental Gold (TSX: CNL) has reported visible gold in exploration drilling at its Buriticá development project, and is set to gain US$25 million from Eric Sprott.
Continental reports visible gold and U$25M investment by Eric Sprott Continental reports visible gold and U$25M investment by Eric Sprott Continental reports visible gold and U$25M investment by Eric Sprott Continental reports visible gold and U$25M investment by Eric Sprott Continental reports visible gold and U$25M investment by Eric Sprott

Visible gold from the Centena vein at Continental Gold’s Buriticá project in Colombia

Staff reporter

Continental shares gained more than 12% in what was a newsy day for the company, which is aiming for first gold at Buriticá within a year.

It said all four initial underground diamond drillholes in the north-eastern portion of the Yaraguá system, targeting the Centena vein family, had encountered high-grade visible gold.

Highlights included 0.5m at 582g/t gold and 159g/t silver, and 1.2m at 44.9g/t gold and 50.4g/t silver.

The company said this portion of the Centena vein was about 100m below current underground development and the intercepts were "significantly higher" than the inferred block model estimate for the area.

Continental also announced mining investor Eric Sprott had agreed to acquire 10.6 million shares at C$3.10, a 2.9% discount to the five-day volume weighted average price to June 21, representing a US$25 million strategic investment which would be used for general working capital and corporate purposes.

The company said Newmont Goldcorp (NYSE: NEM) had five business days to exercise its right and maintain its pro rata ownership.

Newmont took a 19.9% stake in Continental Gold in 2017 and invested $50 million in a convertible debenture in March, as part of a financing package to complete the Buriticá build, which could see its stake increase to about 28%.

Continental Gold said the project was on schedule for its first gold pour in the first half of 2020 and construction was 67% complete at the end of May.

It is planning to update the mine plan for the first three years of the project, which is expected to produce about 253,000 ounces of gold annually over 14 years at an all-in sustaining cost of $600/oz.

Its share price is returning towards a peak reached last year of C$3.98, closing up 40c yesterday to $3.68 to capitalise it about $697 million (US$529 million).