Continental Gold Ltd. (CNL), a Canadian company exploring for the precious metal in Colombia, has received interest from potential buyers as regional acquisition activity rebounds along with the metal’s price.
Continental is rebuffing the advances until it gets a modified environmental license for its Buritica project in Colombia and the price of gold extends its recovery, Chief Executive Officer Ari Sussman said today in a phone interview from New York. The Toronto-based company will be open to offers after it receives the licensing paperwork, expected as soon as this year, he said.
“People want to sign a confidentiality agreement in order to get into the data room,” Sussman said. “It’s not surprising. We’re at 7 million total ounces right now, and we’re going to go bigger. There are very few projects in the world at this kind of scale.”
About $4.1 billion of North American gold company acquisitions have been announced so far this year compared with $1.3 billion in the same period a year ago, according to data compiled by Bloomberg. The price of the precious metal has rallied 9.6 percent this year after plunging 28 percent last year in the biggest rout since 1981.
Continental rose for the first time in four days. The stock added 3 percent to close at C$3.39 in Toronto, after earlier gaining as much as 8.5 percent following the CEO’s comments. The shares are unchanged this year, trailing the increase in gold prices.
Buritica is in northwestern Antioquia province and includes the Yaragua and Veta Sur vein systems. The company has completed 55 meters (180 feet) of a planned 400-meter cross-cut at Veta Sur, with visual results looking “very optimistic,” Sussman said. Detailed results from acid testing on samples are expected in August, he said.
“We’re hitting veins,” Sussman said. “The other positive is that the rock conditions are very good, as expected.”
The CEO said he’s confident about strong continuity of gold in the Veta Sur veins, plus additional mineralization between veins.
“We’ve had great interest from people wanting to dig deeper, signing confidentiality agreements,” he said. “We’ve rebuffed that idea for two reasons: our business plan is we need to permit this project at the bare minimum; No. 2, we have a team that wants to operate this project. However, I’m a businessman and we’ll do whatever makes the most financial sense to the shareholders.”
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