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~~Cordoba drills Colombia's next porphyry belt
by Tommy Humphreys, Resource Opportunities analyst
As a mining jurisdiction, Colombia went from unloved to hyped to ignored. Branded for years as unsafe due to kidnappings and dangerous drug cartels, Colombia experienced a brief resurgence in 2011 as gold plays such as Vetas and La Bodega energized mining markets during gold's heady run to $1,900 US an ounce. Fast forward a few years, and the security situation in Colombia has measurably improved. The junior mining market, however, has yet to emerge from a brutal bear market, with exploration plays in "riskier" jurisdictions hit the hardest. And Cordoba Minerals (TSXV:CDB) is feeling the pain. The stock is, at least. Shares are bumping along at 52-week lows, barely above cash levels. The company, meanwhile, has tapped into top geological talent to assemble and lock up what looks like an emerging copper-gold porphyry belt in an underexplored part of northern Colombia. THE PROPERTY Cordoba Minerals 2.0 and its extensive land package emerged out of several companies: Simon Ridgway's Cordoba, privately held Minatura (Cordoba's largest shareholder with more than 20% of shares), Sabre Metals (which Cordoba took over in 2013) and Continental Gold. It's early, but all indications show evidence of multiple copper-gold porphyrys on the 26,000 hectare San Matias property. Most of the land was acquired from Grupo de Bullet, a private Medellin-based exploration group, through Continental, which had right-of-first refusal. Continental, run by Ari Sussman, is developing the high-grade Buritica gold project to the south - one of Colombia's most exciting gold projects - and owns about 5.7% of Cordoba's shares. Sussman is also Cordoba's chairman. Cordoba's CEO is Mario Stifano, who worked at Noranda before serving as Lake Shore Gold's chief financial officer. Locking up the San Matias property took three years, but the result puts Cordoba in a unique situation, Stifano explains. "We consolidated it all before any other juniors or anyone else came in here," he says. "It's 26,000 hectares of ground and we own it all, so we're not vying or fighting with other juniors for ground." Chris Grainger, Cordoba's vice-president of exploration, spent 8 months going through Grupo de Bullet's 2-million-hectare database and visiting sites. He zeroed the vast land package down to a few thousand hectares of the best prospective ground. And when he began exploring that property more closely, Grainger discovered a copper porphyry outcropping. The discovery wasn't an outlier: an initial drill program has yielded several hits of 100-metres-plus of copper, and it's not only copper. "There's gold in them thar hills" too -- and in the case of San Matias, the hills are low and rolling. It's a welcome contrast to the mountainous terrain of other Colombian exploration districts, where development is complicated by concerns about water, tailings and community buy-in. Intercepts from Cordoba's latest drill results included intercepts of 123 metres at 0.74% copper and 0.60 g/t gold and 99 metres at 0.84 % Cu and 0.49 g/t Au. The discovery hole was 101 metres at 1% copper and .65 g/t gold. Crews are finding near-surface copper mineralization at multiple locations, Grainger explains, but Cordoba is prioritizing the best targets for a drilling-intensive exploration period. "It's one of those rare plays where we've basically tied up a whole belt," Grainger says. "You really don't find that anywhere." The geologist has porphyry expert Vic Wall, co-winner of the 2001 Goldcorp Challenge, in his corner. Wall, who has 30-plus years of geological experience, is a special advisor to Cordoba and a technical sounding board for Grainger. Cordoba's project is on the northern extension of the Mid Cauca gold belt, where Anglogold last year intercepted 810 metres at 1.65% copper and .78 g/t gold. LOCATION, LOCATION, LOCATION Cordoba has the added benefit of being located in a mining district with supportive local residents. In Stifano's words: "Literally, if you had to pick up this discovery and put it anywhere, you'd put it exactly where it is." There are two open-pit mines in the neighbourhood: an operating coal mine 10 kilometres away, and BHP Billiton's Cerro Matoso - one of the world's largest nickel mines - 20 km away. "The people in this region work at mines," Stifano says. "They understand mining, they're in favour of mining. It is their livelihood." When the time comes, there is no doubt in Stifano's mind that Cordoba will get permits. The oil price crash has provided some additional motivation for Colombia's government to diversify away oil exports, which still make up more than half of exports. Last spring, before the crude plunge, Colombia's finance minister said in a radio interview it was "essential" for Colombia that the price of crude not fall much below $100 US a barrel. With oil at about half that price, the perils of petroleum dependency are clear. As for Colombia's reputation as a risky jurisdiction, the country has undergone a sea change that has boosted tourism and seen its major cities renewed. Medellin, the nearest major city, was even named the world's most innovative city in a 2012 competition co-sponsored by the Wall Street Journal and Citi. Three times in the past two years I have been to Colombia to visit mining and energy companies, each time without incident. The short plane ride from Medellin to Cordoba's property is followed by paved roads to site. The family of small scale miners we met there welcomed our group and were happy to show off some of their process. A lack of security in the area, historically, has even worked in Cordoba's favour, Stifano says: it's one of the reasons the San Matias property is so underexplored despite the presence of major mines nearby. When BHP Billiton discovered and developed Cerro Matoso in the 1980s, he explains, Colombia was in the grip of drug gangs and paramilitaries. BHP company officials did not leave the compound, let alone explore in the neighbourhood. The security situation has shifted dramatically, says Grainger, an Aussie who has lived in Colombia for four years: "I've been working there for three and a half years and never had any problems." THE STOCK Despite Cordoba's methodical steps to advance San Matias and prove up its geological theory, the stock has flatlined under 10 cents, caught in the relentless downdraft that has brought down the entire junior mining sector. But unlike most junior exploration companies, Cordoba is cashed-up, with an estimated $3.5 million in the treasury as of the end of 2014. About a year ago, Cordoba raised $15 million at $1 per share with the participation of such investment powerhouses as PowerOne Capital, BlackRock, Geologic Resource Partners and RBC Global Asset Management. Now, the market is valuing the company at just under $5.3 million. To number cruncher Stifano, a chartered accountant, the downside looks minimal and the upside could be explosive. "Some very smart money came in at much higher prices." Cordoba is cashed-up to conduct its 2015 exploration program and has no plans to raise additional funds - especially at these stock levels, says Stifano. But its control of an emerging porphyry district has attracted the attention of several majors, Stifano says. Cordoba would consider doing a joint-venture deal, but only if it creates shareholder value. As for next steps, this year Cordoba is targeting the best prospective areas on the southern 8 kilometres of strike, Grainger says. (2014 work was mostly limited to the northern 3 kilometres of strike.) One valuable clue discovered by Cordoba's geos are high magnetite levels in the highest-grade porphyry areas, Grainger says. So the company is doing ground geophysics and magnetics over several areas to isolate those high-grade porphyry areas. The focus on the southern portion will be ground magnetics and sampling in 6 or 7 target areas with stream and soil anomalies. Once ground magnetics are completed and mapped, diamond drilling will follow. The potential is huge, but right now, there is little appetite in junior mining markets for greenfield exploration. That has suppressed Cordoba's share price, but could multiply the potential return when the tide turns. However, some patience on the part of investors will be required, Grainger says. "I think it's a very good time to be in Colombia, this country's completely wide open. In tough times like this, the good projects survive, and this is one that will survive." Says Stifano: "We're going to confirm to the market that we have a high-grade copper-gold porphyry belt."
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