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Colombian Gold Plays Heating Up

By Darryl Kelley
MidasLetter.com
Friday, March 27, 2009

On Tuesday, Greystar Resources (GSL-TSX) announced the completion a pre-feasibility study on their wholly owned Angostura Deposit and the market was impressed. In a nutshell, the study showed proven & probable reserves of 8.6moz with the total amount of gold to be mined at 7.7moz, with an additional 34.5moz of silver.

Angostura is shaping up to be not just one of the largest gold mines in the world but is also set to be a low-cost producer at $350/oz which would leave some pretty nice margins for the company. However the capital costs of the project is estimated to be approx. $1B, which means they are going to need some major financial backing before they ever get to pour gold.

Ocean Equities Ltd. out of London put some pretty hefty potential valuations ($20.00 - $50.00) on Greystar through peer analysis. (Disclaimer - Ocean Equities Ltd. does not claim to be impartial in their research).

Colombian gold plays have really started heating up since Anglo Gold announced their most significant discovery in decades on their La Colosa Project. The mine near the town of Cajamarca would be the country's biggest gold project, and has estimated reserves of more than 12 million ounces. Production could start within five years, if the government gives the project the go-ahead.

While the big boys have large reserves and resources delineated, two juniors are aggressively drilling in Colombia including Ventana Gold (VEN-TSX) and B2 Gold (BTO-TSX). While BTO has been finding some impressive widths of over a gram per tonne, Ventana has been announcing the barn burners.

Yesterday they announced 57.4M of 8.7 g/t AU following up on previously announced holes in 2009 that have included 48M of 5.35 g/t AU, 22M of 8.68 g/t AU, 12.75M of 34.62 g/t AU. The discovery holes were made in August of 2008 drilling 106.5M of 7.81 g/t AU and 80.90M of 8.6 g/t. Interestingly enough, Ventana borders the Greystar Angostura Deposit but clearly has much higher grades. Their La Bodega Zone carries for about 350M while the super high grade La Mascota Zone now has a strike of 725M and is open in all directions.

Ventana's drill results are nothing short of spectacular in a country that is quickly becoming a world renowned hot spot for precious metals discoveries. The advancements of the projects by Anglo and Greystar are only going to bring more positive attention for Colombia and investors in Ventana Gold.