Source: Streetwise Reports 04/06/2020
Outcrop Gold is wholly focused on its Colombia properties that have a long history of high-grade production.
Outcrop Gold Corp.’s (OCG:TSX.V; MRDDF:OTCPK; MRG1:FSE) coffers and profile received a boost in February when veteran investor Eric Sprott took a $1 million stake in the company. Outcrop, a prospect generator that is also conducting in-depth exploration, holds a portfolio of projects in gold and silver rich Colombia.
The company is also on the radar of newsletter writer Gwen Preston of The Maven Letter, who wrote on February 26, “Sprott’s money (and its endorsement of Santa Ana’s potential) adds exactly the attention and validation that the story needs.”
Outcrop, which until about 18 months ago was known as Miranda Gold, hosts “three flagship projects that should be considered advanced exploration, and others that are a bit more grassroots,” Outcrop CEO and director Joe Hebert told Streetwise Reports.
The first of the projects is Santa Ana, which is the high grade, Hebert said. “It’s a tremendous gold-silver vein system and we are drilling it ourselves, having just completed 12,000 meters.” The project is located in the Mariquita District, which has a long mining history, with records dating back to 1585, and silver grades among the highest in Latin America.
The second property, Cauca, has had 22,000 meters of drilling on it and a non-compliant NI 43-101 low grade resource, “but it’s similar to Santa Ana in that there’s a proliferation of high-grade veins all the way through it that haven’t really been drilled,” Hebert explained.
The third is Mallama, the largest of the three, covering a 110 sq km area, and contains the “biggest gold-silver vein system in Colombia,” Hebert stated.
“All of them have extremely good grade potential,” Hebert explained. “While we are drilling at Santa Ana, the other two we will probably joint venture; we are actively looking for JVs for them.”
As to why a prospect generator would be conducting extensive drilling, “We’ve found that there is a cyclical ebb and flow of major interest in Colombia,” Hebert stated. “We are seeing a resurgence of interest but felt that we had to create our own catalysts because we couldn’t just sit there and not have properties moving forward actively with drilling.”
In February, Outcrop announced the discovery of a new, high-grade gold vein system, La Ivana, at Santa Ana that includes 1 meter of 21 g/t gold and 4,608 g/t silver. This was followed by an early March announcement of drill results that included 0.61 meters of 29 g/t gold and 1,675 g/t silver.
“When you consider the steady decline of grades in the world’s twelve largest primary silver mines to an average of approximately 300 g/t silver—the grades from the current and historical drilling on the Santa Ana project are notable,” Hebert stated. “It is remarkable and encouraging that for all holes, both historical and from our recent drilling, 94% have tagged high-grade silver and/or gold.”
The company noted that “recent compilations and reconnaissance indicate up to 14 km of cumulative vein systems containing packages of multiple veins.”
Hebert explained that in any given hole, the company is finding two to four veins. “Each package, on average, is approaching 900 to 1,000 g/t silver equivalent and it has very good shoots. The continuity is in excess of 200 meters in any given package and at least 200 meters at depth. Then you have two to four veins in the same interval, so you’re able to accumulate both volumes and grades fairly quickly, and, relatively speaking, with less drilling than you might expect in another vein system.”
Outcrop plans to conduct another round of drilling of 12,000 meters, to bring it to the pre-delineation stage.
“Hypothetically, if we put together 18 ore panels of 200 meters by 200 meters, we would be looking at a scenario of over 1 million ounces gold equivalent or 80–100 million ounces of silver. That’s really what our target is. The goal is to get 18 good ore panel hits and our plan is to do that over the next 12 months,” Hebert explained.
Then if that is successful, Hebert stated, “we would come in, us or a partner or a combination, and at the end of 12 months we would come in with another 42,000 meters of drilling. That would be the delineation phase. We would bring in more than one rig and that would take an additional 18 months. At the end of that, we would have at least an Inferred resource and perhaps parts of it more than Inferred.”
Looking ahead, Hebert says that, in addition to seeing the results of the steady drilling at Santa Ana, he expects to see “joint ventures with some respected companies. In the next 12 months, we hope to have three joint ventures.”
In addition to the Colombia properties, Outcrop holds a small royalty on a project in Alaska. But the company’s focus is entirely on Colombia right now.
Outcrop has the attention of industry observers. Gwen Preston of The Maven Letter wrote on March 11, Outcrop “has now reported assays from nine of the 12-hole, 1,300 m program it recently completed on the Porfia vein, a high-grade target with the Ivana vein zone on its Santa Ana project in Colombia. As with previous batches from this effort, this batch included bonanza grades. Highlights include 0.61 m of 29.0 g/t gold and 1,675 g/t silver, 0.58 m of 36.2 g/t gold and 325 g/t silver and 0.85 m of 21.4 g/t gold and 373 g/t silver. Drilling has encountered high-grade mineralization in eight of the nine holes released so far.
“Combined with the historic results from the Santa Ana Royal Mines target to the south, the assays from Ivana suggest the company’s impending 12,000 m program will generate more high grade from the 14 km of veins identified to date on the project.”
Technical analyst Clive Maund commented on February 14, when Outcrop’s shares were trading at CA$0.11, “Outcrop Gold is amazingly cheap here and good value, especially after it just reported positive drilling results, and closed a Private Placement. It is very close to the 2nd low of a big Double Bottom with its lows of late 2018, and looking set to turn higher. . .It is viewed as an immediate strong speculative buy.”
Outcrop has about 68.6 million shares outstanding; with 36.5 million warrants and 6.6 million options, there are 111.9 million shares fully diluted. The company currently has about CA$1 million on hand.
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( Companies Mentioned: OCG:TSX.V; MRDDF:OTCPK; MRG1:FSE,
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