Colorado Tanks on Step Out Drill Results

CXO was one of the most actively traded stocks in mid-session trading, with about 8.5 million shares changing hands, nearly quadruple average volumes, at a price of 77 cents as of 10:46 PST.

In April, the first of two drill holes on Colorado’s North ROK property returned 242 meters of 0.63 percent copper and 0.85 g/t gold, which has been described as one of the best copper-gold intercepts in the province’s mining history.

Investors were impressed, and ran the stock up from 16 cents on April 24th to a May 6 high of $1.25, speculating that the drill results could indicate a deposit similar in size and grade to Imperial Metals’ (TSX:III) Red Chris Mine, which has proven and probable reserves of 301.5 million tonnes and is currently under construction.

Thursday’s step-out drilling results from three drill holes showed gold-copper hits in two of the three holes, but “no significant results” from the third, which would explain why some investors chose to dump the stock.

Hole NR13-003, drilled to a depth of 593.1 meters, returned 0.55 grams per tonne gold and 0.21 percent copper over 153.6 meters.  Hole NR13-004 cut a 205.2-meter interval of 0.50 g/t gold and 0.40 percent copper, including a 131-meter interval containing higher grades, 0.68 g/t gold and 0.56 percent copper.

CEO Adam Travis focused on the three of the four holes drilled thus far that have returned mineralization, stating in the June 6 press release:

“We are very pleased that three of the initial four holes completed at North ROK have returned very significant copper and gold drill intercepts. Our geological mapping and geophysics now suggests that drilling has only tested a very small portion of the kilometre scale alteration systems at North ROK. “

Colorado says it plans to do more drilling on the North ROK property.

Securities Disclosure: I, Andrew Topf, hold no direct investment interest in any company mentioned in this article.