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Ventana Gold Bandwagon Getting Crowded

Commodities / Gold & Silver Stocks Jun 26, 2009 - 07:59 AM GMT

By: Midas_Letter


Best Financial Markets Analysis ArticleNary a week passes without some new analyst report recommending Ventana Gold (TSX:VEN) as a ‘Buy” at prices exponentially higher than the last week. This week was no exception, as yesterday saw Canaccord Adams analyst Nicholas Campbell come out with a $7.50 price target for the company, citing Ross Beaty’s Lumina Capital’s ownership of 11.3% of the company.

According to the report:

“We are initiating coverage on Ventana Gold Corp. with a SPECULATIVE BUY rating, which is based on our favourable view of the additional discovery potential on the La Bodega land package and the probability of the company emerging as a potential consolidation target for an intermediate to large cap gold producer. Our 12-month target price of C$7.50 is based on a preliminary discounted cash flow analysis on the conceptual resource at La Mascota with additional in situ value for the resources at La Bodega zone and for potential resource growth along strike at La Mascota.”

Shares of Ventana have been in strong demand since the company began releasing spectacular drill results at the beginning of this year that demonstrated long intersections of high grade gold mineralization across a strike length exceeding 700 metres.

The Canaccord Adams report goes on to say, “Should the widths and grade of the mineralization at La Mascota hold up along strike, we see potential for the La Bodega project to host in excess of 10 million ounces of gold resources.”

Two weeks ago, TD Newcrest upped their price target for Ventana from $4 to $10 after a visit to the property by mining analyst Daniel Earle.

In the report, he said, “Following our site visit, we now believe the company may be in the early stages of making a world class discovery at its La Bodega gold project in Colombia. As a result, we make a number of changes to our project model, which have the net effect of increasing average production to 550,000 ounces per year (490,000 previously) and net total cash costs to US$295/oz (US$239 previously).”

Ventana’s La Bodega project covers 863 hectares in the historic California-Vetas gold mining district of northeastern Colombia. The La Bodega gold project is roughly 350 kilometres north of Colombia’s capital city of Bogota and 40 kilometres northeast of the city of Bucaramanga.

The La Bodega property is immediately adjacent to Greystar Resources’ Angostura gold-silver project. Access to the property from Bucaramanga is by vehicle on paved and unpaved roads over a distance of 55 kilometres to the town of California. From California, the site is accessible by way of a single-lane dirt road, following the Rio La Baja.

The property has been the site of intermittent small-scale underground gold mining for over 400 years. Currently, there are a number of small scale artisanal mining operations on the Ventana property, the largest being the La Bodega mine, which processes 10-30 tonnes of ore per day. Greystar’s Angostura property is the most advanced project in the area. Greystar has been exploring and advancing the project over the past 16 years, delineating a 15 million ounce gold resource (16.5 million ounces gold-equivalent) and recently delivering a prefeasibility study on the project.

The most significant challenge to large-scale development in the Angostura/La Bodega area is the topography of the region.

To date, Ventana has made discoveries at the La Bodega and La Mascota zones on La Bodega project. These zones lie within a valley with mountains rising to the northeast (where the Angostura open pit is proposed) to the northwest and to the southeast. The Rio La Baja stream lies at the bottom of the valley, which likely precludes large-scale, open-pit development.

Find out more by visiting the company online at

DISCLOSURE: subscbribers own shares in Ventana from $0.80 and up.

By James West

© 2009 Copyright Midas Letter - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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