Cordoba Minerals (TSX-V: CDB) VP Chris Grainger Details High-Grade Gold Discovery at San Matias Project in Colombia

March 7, 2017

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Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is Vice President of Exploration for Cordoba Minerals, Mr. Chris Grainger. Chris has two decades of experience as a geologist in South and Central America, Australia, and West Africa, specializing in grassroots and brown fields exploration, resource definition, and development within a number of different commodities and diverse geological environments. Prior to joining Cordoba in 2012, Dr. Grainger was the Vice President of Exploration for Continental Gold, Chief Geologist for Colossus Minerals, and additionally, Dr. Grainger has held senior level positions at several companies. Chris, thank you for joining me today.

Chris Grainger: Thank you for inviting us, Gerardo.

Gerardo Del Real: Listen, I provided some background there. Could you please share with us a bit more about your background, and just how you got involved with Cordoba?

Chris Grainger: Well, I suppose it comes back to Colombia. We were originally working with Continental Gold some years before Cordoba came around. It was just getting our heads around Colombia. I mean there wasn't a lot of government data available on the geology in Colombia. It was definitely a new frontier and we were definitely one of the first movers to come into Colombia. Everything was kind of new. We had the luxury of having a bit of time on our hands to step back and look at Colombia; where all the prospective areas were.

And compared to the juniors that were coming into Colombia at that stage I think we were ... Seems a bit strange because we were working in different areas, but it was, certainly, those areas that have paid off because we didn't take the easy route in coming into the established artisanal mining areas. We were kind of going through new areas where there was certainly evidence of gold and copper mineralization but they certainly hadn't made any money in exploration and I think that's been the focus of our work, and that's certainly been the key point to our success so far.

Gerardo Del Real: Excellent. Now, I was at the project last month and you were gracious enough to take some time to show me around and really go over the ins and outs of not only the local politics, but the national politics as well. And you mentioned that first mover advantage. Could you please share with us why consolidating the land package was so important, because I know that took a lot of maneuvering and a lot of finesse over several years. When I was at the project, one of the things that really stood out was just the scale of it, and the exploration upside. So, can you talk a little bit to that?

Chris Grainger: I think the idea of tying it all up is because we knew very early that there was the potential to have an entire district there. We basically got into that area quite by chance, we were just really looking for where major structures were going. We wanted to be working in the western Cordillera area, which we think is the most prospective geology in Colombia. And, we ended up there having a look around, just basically getting a feel for the area. And, very early on we could see we were in the right geology. We could see that there was a lot of artisanal mining, and then, by chance there was a lot of very high-grade, small porphyry that were outcropping in our tender package that we actually had up there. And that would be mined by artisanal miners.

So, when you see a porphyry being mined on an artisanal scale, but a bulk scale mining type, you know that the tenor of the copper and the gold mineralization is good. Now we're only targeting the gold mineralization, but first of all, we could see very high tenor porphyries there. We could see, vein systems, a lot of artisanal mining that was going on. A lot of alluvial gold mining, some hard rock mining. So, we quickly stepped back and said, "Okay, what do we need to tie this all up?" That's when the whole creation of Cordoba started, then obviously over the years we managed to strategically put it all together.

Starting off with airborne geophysics, working out where the belts went, where the prospective geography was and basically, just putting it together like a jigsaw puzzle and tying it all up and once we'd achieved that we knew, that we had the luxury of starting to promote ourselves because we didn't want other people to know exactly what we were doing earlier on and I think that was a pretty good strategy.

Gerardo Del Real: It's definitely paid off. Now, you mention the different types of systems on the property. Can we talk a little bit about the strength of the mineralization you've seen thus far? We could definitely start with Alacran if you'd like and kind of scale out there, to some of the other targets on the property, but that's another big takeaway when I visited the property, was just the scale and the strength of the system. It's very, very impressive.

Chris Grainger: Yeah, exactly that's it. What we're seeing in the San Matias project, we're seeing a spectrum of deposits that are all related to each other. So, we're seeing the porphyries, which is the source of the hot fluids and the metals. As you move up sequence, we're seeing vein systems and we're seeing systems like El Alacran, which is basically fluids that are leaking off a big porphyry system and they're mineralizing the country rocks rather than the porphyry itself. Overall, it's like a porphyry system, but just not entirely porphyry. The key to these systems is alteration. If you've seen large areas of alteration, not always mineralized but just altered rocks, it gives you a really good idea of the volume of fluids that have been pushed through that. With metal deposits, it's pretty simple, it's all about pushing hot water through rocks. The more alteration you see, the bigger the, say, size of the alteration system associated with the metal deposits.

We're seeing that everywhere. We're seeing multiple porphyry centers. The alteration around El Alacran itself, is plus kilometer scale, which is extremely significant. The size of the mineralization itself, we've drilled mineralization over 1.3 kilometers a strike, it's up to 400 meters lateral now. Still open at depth is going to be new zones associated with that, you don't just get a system of that size all in one place. There's normally, there will be extensions. There will be new parts of the system in different places. It's all related to structure as well, right?

What we're seeing is big alteration halos, we're seeing a big package of ground. The entire San Matias package, which is over 30 kilometers of strike, north, south, is basically one big alteration halo with multiple centers of porphyries and artisanal mining, which is giving us a guide to where other metalliferous deposits are in the area. It's completely open. It's such a big land package we've only really been focusing on a small part, but we've had a lot of success so far. There's a long way to go. There's a lot more to explore there.

Gerardo Del Real: Excellent, now you recently had an intercept, that if I recall correctly, was .9 meters of 4,440 grams/tonne gold. I actually had an opportunity to see that core when I was there in person. Can you talk a bit about that and how San Matias compares to other projects in Colombia?

Chris Grainger: It was a bit of a surprise to us, but in hindsight, we should have been looking for it. Basically, El Alacran is a big copper-gold disseminated style system, so it's bulk tonnage. We were getting sniffs in some of the drilling where we're getting some high-grade gold in sifts and certainly the artisanal miners, in the early days, they wouldn't have been mining the bulk material that we're looking at, as a modern mining operation.

When we looked in the artisanal mines and we got some hits in the drilling, we were lucky enough to snag the very high-grade zone, which was very indicative for us because what we'd hit so far, in a copper-gold ore body was zones where there was zinc enrichment and they had elevated gold in there. When we hit the high-grades zone, which as you said, was .9 meters at just over 4 kilos per tonne gold. It was in the center of the zinc zone, which had a lot of carbonates so, it's what we call a CBM System and we're pretty used to those systems because Buriticá down the road, where I used to work at Continental, which is over 10,000,000 ounces at 10 grams gold, is a CBM System. They're very similar in metallurgy, the vein system that we're seeing which is overprinting El Alacran. You don't find these things, you don't just find a small part of it, just one or two vein systems. They're generally related to a bigger system.

The reason we didn't come across them earlier is because we were drilling across the copper-gold ore body at the optimal angle, but unfortunately that was almost parallel to the vein system.

Gerardo Del Real: Right.

Chris Grainger: So we're lucky that we snagged onto them. But now that we have we're now turning the drill rigs around. Looking at different orientations to the vein system as it cuts across the copper-gold system. And that's what we are targeting now, and we will be targeting for a fair few months to come.

Gerardo Del Real: Excellent. And just for everyone that maybe is new to the story this is a completely separate target from the Alacran target, correct?

Chris Grainger: Yeah, so this is a high-grade overprint. It's a vein system, so it is another target. We're pretty sure it will be within and also peripheral to the copper-gold ore body. It is a big target because they're very narrow veins, but they could bulk out in certain areas. They could bulk out in certain areas, but to date what we've found is all within the pit shelf so it's extremely high-grade and high value ore that's going to be coming out with the copper-gold ore body, but we're pretty sure it's going to have a significant strike length. We think we've got at least a couple of hundred meters so far looking at the old core, seeing where we've got these zinc hits there that are associated with gold. So far we have a couple hundred meters of strikes, so now we need to narrow in, focus in, and target those areas. Work out where the high-grade gold parts of it are, and then follow up from there.

Gerardo Del Real: Excellent. Now speaking of follow up and digging in obviously, you mentioned that you have the rigs turning. What are the plans there? I understand there's four rigs there right now? Is that correct?

Chris Grainger: Yeah, so we've started off the 2017 drilling season. We have 4 rigs at site. The idea is we'll be focusing 3 of those on El Alacran. 2 of those will be dedicated to following up the CBM high-grade vein system. We have another one which will be testing extensions and new zones around El Alacran because we're sure they're there. The soil geochemistry that we have indicates that there's multiple new targets that we have immediately adjacent to Alacran and also along strike. And then we have one larger rig which is testing porphyry targets, which is drilling right now in the Montiels where we're drilling deeper holes. They're looking for the roots of the porphyry system there, and we'll be testing some of the other targets. Such as Costa Azul, Buenos Aires, some other new targets that we have because at the end of the day we've got over a dozen targets that are well advanced. We probably have in excess of two to three dozen within the San Matias project. We're in the phase now where we're working them up to get them drill ready because this year be a very sharp-end exploration type drilling campaign.

Gerardo Del Real: Excellent. Now can you again, just for those that are newer to the story, could you provide a bit of context as to how much of the property is left to explore. Because you mentioned the twelve targets, you mentioned all the follow up at Alacran, and obviously following up on the CBM veins, but can you talk a little bit about San Matias in general and just how much of it is still unexplored.

Chris Grainger: Well San Matias basically north-south is about 13 kilometers of strike. There's three main structures on there, of which all potentially have porphyries, vein systems, and also El Alacran's type structures on them, deposits on them. What we've really focused on the last couple of years is only really the northern 3 kilometers, because that's the most accessible, that's where we're seeing the most obvious outcropping mineralization. It has El Alacran, it has the Montiels, and that's where most of the focus has been. Now we are working our way south. Basically we've been doing that with stream sediments first. We've soil sampled most of the areas and we've got numerous targets to the south. I mean, it is really a 13 kilometer long alteration zone, of which there is multiple zones which have had artisanal mining. We generated a lot of targets through surface sampling. We're getting them mapped, getting them detailed, to get them to drill-ready stage, and that's going to be the focus of 2017.

While we already have a series of drill targets that are ready to go, the focus will be on pushing further south, testing new zones. There's a lot there. I mean, we have a soil anomaly which is over 1 square kilometer of gold and soil anomaly. There's no copper in it, it's a gold anomaly. It has no drilling in it. We'll be hoping to drill test that target later on this year, but it's one of numerous targets that are there. It's in the dozens, I can't remember all the names, that's how many we have right now.

Gerardo Del Real: Obviously, it's going to be busy at San Matias. When I was in Colombia and we had the opportunity to sit down and chat a bit you mentioned the possibility of looking at other projects. Is that something that's still on the mind of Cordoba? You mentioned the first mover advantage. You are very familiar with the area. You've obviously proven yourself, and the team at Cordoba has proven itself very adept at negotiations. Is that something that's a possibility for 2017?

Chris Grainger: Well yes it is, and it's ongoing. We actually started, early days when we first flew airborne geophysics up in Cordoba basically looking to tie up the whole district, we realized fairly early that there were other potential areas there. Cordoba isn't just one belt. We thing the San Matias is the most obvious and most prospective at this stage and that's why we've focused on that. But early on what we did, we made over 300,000 hectares of applications throughout Cordoba.

The reason we did that is because we needed to tie up all these peripheral areas. So, we weren't sure if it was the same belt or it was different belts. We had the luxury of being able to tie everything up. Early last year we started our first regional campaigns looking in the applications. We've started an ongoing stream sediment sampling program to basically clear those areas so we can narrow them down to the most attractive areas we want to keep. That's well advanced.

We're starting to get some results in now and it's extremely encouraging because we're seeing belts in Cordoba which weren't really described well by the government. I've been out to see some the anomalous areas. We're seeing geology which we didn't think would be in that part of Colombia. It's extremely prospective, I can't say any more than that. But, we are fairly aggressive. We have two teams of stream sediment samplers carrying out programs. They'll be working at least through until mid this year. We are already following up on the anomalies now with geologists and having a look and working on what's going on.

It's like opening new pages on a new book. We had a basis for what we thought was in Cordoba. The government data was a good base to start on, but now we're seeing a lot more things. I think that's a luxury of having 7 years in Colombia, being able to see as much of Colombian geology and deposits as we can because now we can relate what we're seeing into our areas as well.

That's helped us in the long-term. Having the luxury of having time in Colombia. Having the ability to sit back and look over things. Having the opportunity to visit as many deposits and as much geology as we can has certainly helped us work out what's going on in our areas.

Gerardo Del Real: Wonderful now I was fortunate enough when I visited the project to speak to a lot of the locals that were there and witness first-hand the security situation, which is largely improved from the perception that Colombia tends to inspire among many people. Can you speak a little bit to that Chris because I was really really impressed by the security protocols, the way that you approach the situation there with the locals. And again, just the overall security. We were out. We spent the evening out and it felt safe. I was comfortable. Driving out it was comfortable. Can you talk a bit to that please?

Chris Grainger: Okay, so, 5 years that part of Colombia was a very different place and I've had the luxury, and the pleasure, of seeing it become a very pleasant place to work, a very safe place to work, and that's mainly because of the communities. The part of Colombia we're working in, obviously because of Cerro Matoso, which is the big nickel laterite mine which has been in operation there for nearly 30 years, brings a lot of royalties into the government.

The government understands in this part of Colombia mining is important. There's been a lot of coal mining recently. The power line which will run through to Panama to sell energy to the Panamanians has basically been setup 12 kilometers north of our project. So, what we're seeing in that part of Cordoba is it's becoming very strategic for their government. They've invested a lot of time and money to ensuring that the security is good.

That brings companies in. We were already there, but it’s made our life a lot better. It’s made the communities that are in those areas feel a lot better, particularly working with companies. So we've invested a lot of time and money into the communities, particularly the people in Alacran, and that's paid off because it's a really good relationship between both of us. We both understand what each other is doing. They have a mining background, that's very good for us because we employ a lot of people from the community. They have the skills that we need. They understand what the process is that we're trying to carry out. And, they understand the end goal as well there. So we have been very fortunate because it's probably one of the examples of where mining can work well with the communities in Colombia, and I know there hasn't been a lot of good views about that in the past, but Cordoba is certainly a case example of where it’s been successful. It'll be more successful going forward, we've been very lucky, but we've put a lot of work into it as well.

Gerardo Del Real: You mentioned the investment, the foreign investment, that's coming into the area, and the local investment by the government. Can you speak a bit to that because I know when I was there, again, it's obvious the infrastructure upgrades on already great infrastructure by the way, but the infrastructure upgrades were also apparent. There's a lot in the works. Can you speak to the foreign investment that's coming into that region as well?

Chris Grainger: Yeah well, it’s been quite dramatic. First of all, energy. I mean, it is going to be another energy center in Colombia it doesn't have the infrastructure like the Magdalena Valley has for the big coal mines like Cerrejon, et cetera. This is a new coal belt, so the government is taking advantage of that. Rather than building a lot of infrastructure on the coast, they're investing in power stations. A Chinese company has just come in and built a large power station there, that’ll be supplying the local grid. But, it will also play a part of the power line which is being built to sell power to the Panamanians, which will run through southern Darien. So, you see the energy taking the immediate steps to move ahead with the investment there.

We're also seeing a lot more focus on the coal mining because the coal mines are starting to realize they can mine coal there. They can sell it directly to the power plants that are local and create energy for local grids and also for Panama. So, we're seeing a lot of investment like that coming through. Cerro Matoso, which was originally built and was run by BHP and now South32, that's a 30 year investment. They've got a full thorough nickel smelter there. They just received their license for another 30 years of mining. And it's probably one of the most profitable open-pit nickel laterites in the world.

And then comes in us. We're the next stage of metal miners who are looking for gold and copper. So, I think we're early stage, but there will be a lot more exploration, particularly in the northern parts of Cordoba in time. But you can really see that as it stands right now it's a very strategic area for the government and it will continue to grow that way.

Gerardo Del Real: Chris I want to thank you so much for your time. It has definitely been insightful. Is there anything else that you would like to add?

Chris Grainger: Just everyone keep believing in Colombia. As a geologist, it's pretty rare to be able to come into a country and see the massive prospectivity that's here. Such good people. They've actually got a very good government. They're very pro-mining. I understand it's early stages and they're going through a little bit of teething problems, but if we look at the success stories in Colombia, and they're all exploration so far. And if you look at discoveries like La Colosa, Quebradona, Buritica, I mean there's been over 70 million potentially 100 million ounces of gold found in Colombia in the last 15 years, of which none of it has been mined yet. They've only scratched the surface with exploration. We're coming into a new frontier looking at copper-gold. Colombia is an absolute, it's an incredible place to be as a geologist and I hope to spend most of my career here because I see easily that exploration will be going on for a long time in Colombia. It's early days and it's such a great place to be.

Gerardo Del Real: Excellent. And again, you speak in the first person. You're not saying this as someone that just sits behind a desk in Vancouver. You actually live there, correct?

Chris Grainger: Yeah, I get the good job. I get to live in Medellin. I much prefer, the way that we work as a company, and we've worked together as a group for about 14 years now, is that we always need someone on the ground, and that's me and I enjoy my job. I've been living in South America now for probably about 17 years. I've been in Colombia for 7. It's wonderful and it's just good to be on the ground because you get to see so much more. You're on the sharp edge of what's happening with new discoveries. We can just get out. We're more flexible. We're more mobile. We can do whatever we want, and I think that's the edge with us. I mean, it's just a different way of looking at things. As a country to live in I'm very happy, and my family are very happy living in Colombia that's for sure.

Gerardo Del Real: Wonderful. Chris, thank you again. It sounds like it's going to be a very, very exciting year for Cordoba here in 2017. Obviously, we're all anticipating assays and news. Keep at it. Thank you so much.

Chris Grainger: Thanks Gerardo, that was a pleasure. Thank you.

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