Esperanza Resources Takes Cerro Jumil Property Step Closer to Production

Drill rig at Cerro Jumil

Drilling activities at Cerro Jumil.

Positive drill results continue to come from the Cerro Jumil property in Mexico, which is 100% owned by Esperanza Resources (EPZ – $1.33).

Infill and step-out holes 219 through 222 intersected gold values between 0.82 and 2.51 grams per tonne. Noteworthy in hole 220 are two consecutive samples of 1.5 metres each, which contain 119 and 82 grams per tonne respectively (see table below).

However, for both the calculation of an average interval grade and a resource estimate, assay results exceeding 10 grams per tonne are reported as a only 10 grams per tonne. This is called top cutting and is used to minimize the impact of the nugget effect.

Furthermore, drill results from holes 223 through 225 in the north, clearly show us where the mineralized zone ends as they intersected no mineralization (see map below). Three step-out holes in the Maiz zone, unfortunately had no significant mineralization.

Upcoming Work

Two additional drill rigs have been contracted and will be operating at Cerro Jumil by the end of this month. They will be used for step-out drilling at the Southwest Extension area and the Colotepec target zone; and for infill drilling at the known mineralized zone to upgrade the inferred resource to measured and indicated.

By adding two rigs Esperanza shows it wants to move the project forward quickly.

Project Financing

When a property is sufficiently developed, the owner will seek equity and debt financing to move it to production. Because Cerro Jumil is entering that stage, Esperanza has appointed Euroscandic as an independent financial advisor to help find a bank or institution to lead the debt portion of the project financing.

Dialogues with non-equity capital providers have been initiated with the aim of awarding the Lead Arranger mandate in the first quarter of 2012.

It’s a wise decision of Esperanza to initiate this process as it will allow the Lead Arranger an early review and participation in the feasibility study, which will undoubtedly expedite the financing process.


With over $20 million in its treasury on September 30, 2011, Esperanza is sufficiently funded to continue the development of Cerro Jumil and to bring it into full feasibility in the course of 2012 with the ultimate goal of advancing the property to production.

Cerro Jumil currently has a resource estimate of 1.2 million gold equivalent ounces and analytic results from the 2011 drill program show the number will be expanded.

If you haven’t taken an initial position in Esperanza Resources, do so now. And if you already own shares of the Company, you might consider adding some. I will take advantage of these prices to add to my position.

Our current price target for Esperanza Resources is $3.36. Advice: BuyPrice Target: $2.40Latest Company Report (pdf)

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