BullMarketRun.com

BullMarketRun first uncovered Seafield Resources (SFF, TSX-V) in the summer of last year when it was trading by “appointment only” between a nickel and 7 cents.    The company has gone through a fundamental transformation since then, an event we correctly anticipated, with a very significant exploration move into Colombia.  The stock exploded to a high of 35.5 cents in late February when it probably got a little too far ahead of itself. Since March Seafield has consolidated, trading within a range of 15.5 cents to 27 cents.  The last trade before this morning’s halt was 23 cents.

Earlier this week, on Tuesday morning, we stated the following regarding Seafield:

“We’re keeping a close eye on Seafield Resources (SFF, TSX-V) which has shown some recent strength including a reversal in its 20-day SMA and a dramatic surge in buying pressure as revealed by the CMF…the stock closed unchanged at 22.5 cents yesterday…SFF does face strong technical resistance in the 24 to 27 cent range, as we saw in September and October, so it will take a major development for this stock to break that barrier…the current technicals, however, suggest Seafield should be watched closely right now.”

That “major development”, it appears, has just occurred.  Seafield today reported the first set of drill results (three holes in total) from its Miraflores Property which forms part of its nearly 70 square kilometre Quinchia Project in a formidable Gold belt in Colombia, less than 10 kilometres south of Medoro Resources‘ (MRS, TSX) 9.7 million ounce Marmato Deposit.

The first two holes were drilled to define the projected margin of the breccia body at Miraflores and returned 78.2 metres grading 0.48 g/t Au and 34 metres of 0.80 g/t Au – certainly nothing to get excited about.  But what is worth getting excited about is the third hole which graded 1.29 g/t Au over a whopping 449 metres (from 53.1 to 502.1 metres).  Hole #3 was drilled at an angle of -50 degrees to a depth of 596 metres from the northeast contact to the southwest contact (check out the drill plan on the Seafield web site) through the centre of the breccia body.

Hole #3 is the best result ever obtained at Miraflores and supports the interpretation in the 43-101 that there appears to be a bonanza zone to the breccia, a high-grade core zone with an increased abundance of visible Gold and enhanced overall grades.  Mineralization is contained within two forms in the breccia body at Miraflores, as general low-grade disseminations within epidote-carbonate-quartz-pyrite cement in-fillings and high-grade fault veins which cut the breccia body.

Seafield also stated today that core logging from several holes shows that the breccia body is more extensive at depth than was inferred from previous drilling.

Prior to Seafield’s drilling, only 10 holes had ever been drilled at Miraflores (in 2006 and 2007).  Seafield used information from those holes as well as 154 underground samples to produce a 43-101 inferred resource earlier this year of 18.6 million tonnes grading 1.3 g/t Au.  At a cut-off grade of 0.50 g/t Au, this represents 976,000 inferred ounces.

Results are pending on nine additional holes at Miraflores which should give the market plenty to speculate about in the days and weeks ahead.  In addition, drilling should be starting soon (if it hasn’t already) at Dos Quebradas which we believe is an even better target than Miraflores.

Another factor in Seafield’s favor at the moment is the fact Medoro is expected to come out with an updated 43-101 resource estimate for its Marmato Deposit in the very near future.  Medoro has been a heavy trader just recently and we suspect the new 43-101 could show a significantly expanded resource at Marmato.

What we see unfolding at Quinchia is this:  At least three or four separate deposits that together give Seafield a multi-million ounce resource that acquisition-hungry Medoro Resources then goes after in a possible takeover of Seafield.  That’s very speculative on our part but certainly a possible scenario.  It’s important to point out that the two key players in Seafield’s Colombian venture and acquisitions are the same individuals who assembled Medoro’s Marmato land package – Ian Park and Stewart Redwood.  Both know this area of Colombia like the back of their hand.

Today’s results prove there is very strong potential for a significant expansion of the Miraflores resource.  At Dos Quebradas, Seafield has some outstanding  porphyry targets to drill based on historical work and very promising results from a recent soil geochemical survey the company completed (a soil anomaly discovered one kilometre to the northeast of the Dos Quebradas porphyry is at least twice the size of the Miraflores breccia pipe).

Mark our words, Miraflores is just the appetizer – Dos Quebradas is the delicious main course about to be served.   A third Seafield project at Colombia that looks very interesting is Chuscal where underground sampling indicates the existence of a large porphyry system.  Some small scale mining is currently taking place at Chuscal, similar to Miraflores, and “significant geochemical anomalies have been outlined at Chuscal over a large magnetic anomaly” as stated in a report on Seafield’s web site.

The Quinchia district features excellent infrastructure with Pan American highway access, three international airports, electricity, and new access to the Pacific Coast on a railway line currently under construction.  All Seafield projects are below 2100 metres in elevation.  While it’s not Quebec, Colombia is still regarded as a good jurisdiction for mining and exploration.

Seafield’s current market cap is $23 million.  As of September 30 the company had just over $3 million in cash.  Our math shows there are approximately 146 million Seafield shares fully diluted with about 41 million warrants outstanding (as of Sept. 30) between 10 cents and 25 cents that would bring in nearly $5 million to the treasury.  The market will have some paper to chew through but Seafield has shown the ability over the past year to produce some very high trading volumes – 10 million shares in just one day last spring, for example.

Investors have good reason to take a liking to today’s drill results from Miraflores and the market “psychology” surrounding Seafield should improve substantially.  At times we have been frustrated by the pace of exploration at Quinchia this year but we have never doubted the potential of this major project.  There’s nothing like a good drill result to get the ball rolling.

Disclosure note:  the writer does not currently hold a position in SFF.