January 18, 2010
With Ventana’s Drill Rigs Just A Stone’s Throw Away, Galway Resources Is In A Prime Position To Attract A Bid
By Alastair Ford
The credit crunch was the occasion of a brief hiatus of work on the Columbian ground held by Galway Resources. The hiatus didn’t last long, though, as the company’s 335.6 hectares in Columbia’s California district just has too much going for it. For a start, there are the garamperos who’ve been working the property since time immemorial. Galway boss Robert Hinchcliffe calls them “cable car miners” on account of their method of shipping ore down the hillside. “They’re not taking that much”, he says. But he adds that the Galway team make sure they get a good look at what they do take out.
Meanwhile, Galway’s got its own ongoing sampling programme at California. The most recent results, from the Pie de Gallo section of Galway’s ground, give plenty of grounds for encouragement. Surface channel and chip sampling of outcrops showed, among the best results, 28 metres at 16.6 grammes per tonne gold, 34 metres at 3.8 grammes per tonne, and 16 metres at 4.5 grammes per tonne. That’s certainly enough to keep the interest levels up, especially when one combines the new data with historic work done in the 1940s by former owner Anaconda.
So, with gold as strong as ever as January 2010 rolls on, perhaps it’s not surprising that Galway’s share price has been on the march. Many mining companies have enjoyed buoyant share prices over the last six to 12 months. Galway’s though, hasn’t just ticked up nicely with the market recovery, it has soared. From a January 2009 52 week low of C$0.04, the shares have rocketed to their current price at around C$1.50. That makes it a ten bagger several times over. There must be more at work here than the gold price and a surface sampling programme, surely?
There is. A quick look up from Galway’s work on the ground reveals all. To the north east, not two kilometres away, the drill rigs of Ventana loom against the sky. Further up the same trend, by another couple of kilometres, Greystar’s Angostura property continues to go from strength to strength. It has more holes in it than a Swiss cheese now, and boasts a resource base of 15 more than million ounces, with the likelihood that there’s still some left. Ventana, meanwhile, is going hell-for-leather with 10 rigs on its Bodega project, such that its’ latest work comes within 200 metres of Galway’s Pie de Gallo project.
Ventana’s initial discovery hole back in 2006 encountered 107 metres grading 7.8 grammes per tonne gold. That’s a result that might not have come as much of a surprise to David Rovig of Greystar, who’s been banging the drum for mineralisation in the district for many a year now. But the confirmation just keeps on coming. The latest results from Ventana, released within the past couple of days, shows included 93.5 metres at 15.8 grammes per tonne. Hardly surprising that Ventana’s share price has also been very strong lately, nor that it’s been able to raise substantial funds on the Canadian markets within the last few months.
Many in the Canadian markets have been waking up to this newly apparent axis of mining properties along the California vein structures. What’s nice for Galway, of course, as Robert Hinchcliffe succinctly puts it, is that there was, and is, no need for the company “to re-invent the wheel”. The plan is simply to do exactly what Ventana did – to do geochemistry work, then do geophysics on top of that. With that done, reckons Robert Hinchcliffe, “your anomalies light up like a Christmas tree”. With drill targets duly identified, Galway could then get cracking.
It may not come to that, though. Market chatter that Ventana has been taking a close interest in both Galway and Greystar, given that it’s backed by a very wealthy Brazilian, has spurred further interest in the shares, and may not be entirely idle. The waters have been muddied lately, though as Ventana has now become embroiled in a legal dispute with on its own ground. But that new dynamic marks a real change from how things looked just six months ago. Back then, says Robert Hinchcliffe, “even the dogs wouldn’t talk to us”. Now, there’s interest all over the place, and the company isn’t even drilling yet.
A trade sale to Ventana has to be the favourite outcome, although Galway isn’t in a rush. Counting outstanding warrants that are very much in the money, there’s enough in the bank for two years’ worth of work, reckons Robert Hinchcliffe. So plenty of time to add value while Ventana works out its own strategy. In the meantime, Galway's also got coal and a molybdenum-tungsten project ticking over in the background.