Continental Gold released an updated mineral resource estimate for the Yaragua and Veta Sur vein systems at its 100 percent owned Buritica project in Antioquia, Colombia. Undertaken by independent consultants from Mining Associates, the mineral resource estimate at a gold cut-off grade of three grams per tonne Measured + Indicated is 1.64 million ounces of gold; 4.6 million ounces of silver; and 55.8 million pounds of zinc.

Commenting on the news, Raymond James analyst Gary Baschuk wrote, “We are maintaining our Outperform rating and $11.25 target price (6 to 12 months). We believe the new resource is a positive achievement but we require additional detail, expected to be released within 45 days in the Technical Report, to establish the expansion potential of the deposit beyond our estimated doubling of the initial resource.”

Baschuk continues, “Our $11.25 target price is based on a cash-adjusted 0.96X P/NAV multiple, based on our view of the high grade nature of the deposit and the potential for expansion along strike and at depth, applied to our NAVPS estimate of C$11.84. As of September 30, we estimate CNL had approximately $101 million in cash and equivalents.”

TD Securities analyst Daniel Earle also likes the news. Earle writes, “Buritica one of the largest undeveloped high-grade resources in the world and enhances its attractiveness to potential mid-tier and senior gold companies. We maintain our Speculative Buy recommendation… and our 12-month target price rises to $15.00/share (from $12.00).”

Continental Gold (Stock Profile – TSX:CNL & OTC:CGOOF) is an advanced-stage exploration and development company with a portfolio of precious metal projects in Colombia.

Formerly the largest gold producer in South America, Colombia has produced over 80 million ounces of gold. For many years, civil unrest prevented the development of the country’s mining industry.

Improved security conditions since 2002 have paved the way for a new wave of modern exploration and mining development. The increased stability in Colombia is a result of the Democratic Security Policy introduced by the administration of former President Alvaro Uribe.

Shares of Continental Gold closed the day at $9.90 up $1.09 for a gain of 12.4%; and, within 13% of Baschuk’s target price.