Estrella Gold (CVE:EST) announced this morning the termination of its two option agreements for the Colpayoc gold project located in northern Peru, citing recent social issues at nearby gold mines and cost as being behind the decision.
The 54 square kilometre property at Colpayoc reported a +300,000 ounce NI 43-101 compliant gold resource open in three directions, and four other areas of mineralization.
Colpayoc is located 12 km southwest of the Yanacocha project, South America's largest gold mine, which has produced more than 26 million ounces since opening in 1993.
Estrella told investors Friday that earn in agreements on the Colpayoc project with the two claim holders have been terminated, but it will remain in contact with them should conditions change in the future. The claim holders can now option or sell the projects to third parties, with Estrella having no further claims on the project.
"The company will now move ahead and focus its resources on advancing its projects in southern Peru as well as exploring for more prospects in this part of the country where the environment for discovery of potentially economic projects is more favourable," said president and CEO, John R. Wilson, in a company statement.
Estrella, a prospect generator, identifies and acquires new properties, conducts initial exploration and then forms joint ventures for more advanced exploration. The Vancouver-based company is focused on gold exploration in Latin America and has 22 active exploration properties in Peru alone, five of which are held in venture agreements.
The company's other projects include a joint venture with Cliffs Natural Resources Exploration (NYSE: CLF) on the Pampa Poroma iron oxide, copper, and gold project in south-central Peru. The 900 hectare property is 20 km northeast of the Marcona-Mina Justa Iron oxide, copper, gold district, site of three major IOCG deposits.
Cliffs is also joint ventured with Estrella on the 52,000 hectare Yanac property located in south-central Peru, where results issued late last year identified a prospective outcropping area covering 1 km by 0.75 km. Initial rock samples returned copper values ranging from 0.12 per cent to 2.9 per cent, with some samples returning upwards of 0.74 per cent copper values.
Mines Managment (NYSEAMEX: MGN) (TSE: MGT) (FRA: MM2) holds a joint venture with Estrella on the La Estrella Gold, silver, copper project in central Peru, which saw mining results in late 2012 that turned up seven of eight holes drilled under a 2,700 metre campaign, intersecting gold and silver mineralization exceeding 100 metres thickness.
Another joint venture partner is Lara Exploration (CVE: LRA), with whom Estrella is collaborating on the Isy gold property covering 3,100 hectares in southern Peru, where Estrella's reconnaissance mapping and sampling outlines epithermal-style alteration with anomalous gold, silver and arsenic values.
In addition, the company's properties available for joint venture include the Cerro Cori porphyry copper and gold project, the Ccello Ccello epithermal gold and silver project and the Pacurana and La Tola projects, both epithermal gold and silver.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.