UPDATE 1-Cangold mulls restarting, buying gold projects; shrs up
reuters.com
Mon Dec 13, 2010 1:42pm EST
* To buy advanced stage gold project by early 2011
* To restart exploration at gold property in Canada
* Sees significant potential in Peru
* Stock up 22 percent
Dec 13 (Reuters) - Cangold Ltd (CLD.V) said it is looking to renew exploration at a gold project in Canada and will buy an advanced gold project by early next year, sending the junior explorer's shares up 22 percent.
The Vancouver-based company, which owns the Plomo gold project in Mexico, said it turned its attention to buying advanced gold projects because of difficulties in funding early stage gold projects in Mexico since 2008.
This year, deals for two targeted projects fell through after the owners backed out because of rising gold prices, the company said in a statement without identifying the parties.
Cangold is also incorporating a unit in Peru as its management believes that there is significant potential there.
The company is mulling restarting exploration at the Argosy project in Onatario's Red Lake mining division, which was closed in 1952 after producing 101,875 ounces of gold.
The Argosy mine was only developed to a depth of 900 feet, but drilling programs in 2002 and 2003 confirmed the extension of gold mineralization below those depths, according to the company's website.
Cangold said there could be a much larger gold deposit at the project based on Gold Canyon Resources' (GCU.V) exploration success on a property 7 kilometres south of the Argosy property.
The company said it is also considering the acquisition of more ground in the Birch Lake Greenstone belt, which houses both the Argosy property and Gold Canyon's Springpole Project.
While Gold Canyon's shares rose 4 percent last Thursday when it announced the drilling success, Cangold's stock soared 22 percent. Both stocks gave up those gains on Friday.
Cangold's shares were trading up 22 percent, or 10 Canadian cents, at C$0.055 in Monday afternoon on the Toronto Venture Exchange.
Gold Canyon's shares, which have gone up 11 times so far this year on a string of successes at its project, were down 4 percent at C$2.17 in afternoon trade on the venture exchange. (Reporting by Savio D'Souza in Bangalore; Editing by Joyjeet Das) |
