|October 20, 2011|
President's Letter October 2011
In April of this year, Cosigo completed a reverse takeover and became a publicly traded company on the TSX Venture Exchange. Since then, we have continued advancing our South American projects. I'd like to take this opportunity to give you an update on our activities and plans for the immediate future.
The Cosigo team is well versed in mineral exploration and committed to socially and environmentally responsible exploration. In-house designed and purpose-built exploration equipment forms the backbone of an exploration approach focused on drilling. We pride ourselves on a unique approach to early exploration. Referred to as "geodrilling," the approach allows for rapid and low-cost determination of the near surface limits of mineralized geological targets.
We have concentrated our exploration efforts targeting gold deposits in the highly prospective Taraira (Traira in Brazil) Gold Belt along the border between Colombia and Brazil. This area is underlain by rocks that have similarities to the Witwatersrand complex in South Africa where approximately 40% of all gold in the world has been mined. Gold is present in two forms, fine detrital and relatively large irregular grains. The gold targets in the Taraira Gold Belt are very large and have the potential to develop into several major gold deposits. Gold grades from bulk samples have assayed to over 35 grams per tonne using gravity separation. Preliminary metallurgical work suggests that recoveries of over 70% are possible with gravity separation.
Cosigo's main focus is the Machado Project, which covers more than 20 km of Machado ridge on the Colombian side of the border. Colombian government geologists first worked on the Machado Project in the late 1980's. Twelve diamond drill holes were completed to depths of up to 100 meters. Gold grades were erratic but some were very high grade. In 2007, the 10,000ha Machado property, along with two other properties, was put up for bid by the Colombian government as national treasures. Competing against several much larger gold companies, Cosigo won the bid for the Machado Project.
Cosigo completed a Mobile Metal Ion (MMI) soil geochemistry survey on a 100 meter by 100 meter grid over approximately 70% of the bid area. Together with geological mapping, this survey has outlined large anomalous targets that are considered ready for drilling using two reverse-circulation drills already on site. The Taraira Gold Belt is unique in that the gold mineralization is very coarse grained. The coarseness means that extra care must be taken in sampling to obtain repeatable and consistent grades. Tests are currently being carried out by our Canadian team to establish the best sampling parameters and assay methods for the Taraira Gold Belt.
We are currently awaiting a Forestry Reserve Subtraction permit from the government. Once we receive this permit, our drill program will be able to proceed at Machado.
On winning the bid for the Machado Project, we worked on an extensive MMI survey and developed several targets for follow up drilling. The Environment Ministry then decided that for the exploration phase, all mineral exploration and energy companies would need a subtraction permit for any work in forestry reserves. Together with numerous other exploration projects, the Machado Project is located in a forestry reserve that covers 58% of Colombia.
As part of our Forestry Subtraction process Cosigo has now conducted four formal Prior Consult meetings with the Natives of the area (about 300 people in 200 square kilometers) and with the townspeople of Taraira (about 160 people). Results from these meetings have been overwhelmingly positive.
A final Public Audience will be conducted near the end of November in the town of Taraira. This meeting will have government officials from Bogota attending, along with most of the people from the area. Cosigo will have thirty local speakers presenting the positive aspects of exploration and mining. If there are no serious objections or concerns, Cosigo may have the forestry subtraction permit before the end of the year. Any serious concerns voiced during the Public Audience will be considered by the government and addressed within two months following the Public Audience.
We continue to have our prospecting teams exploring and sampling areas in both the Taraira Gold Belt in Colombia and in the Traira Gold Belt in Brazil. Valuable information is being gathered that will lead to several additional targets and projects in these areas. The Cosigo team has been working to advance a developing target on the Brazilian side of the border to the drill-ready stage. We are very excited about this target, which appears to rival the Machado Project in both size and grade. This work continues as we await the completion of the Colombian approval process for our drill program at Machado.
We recently completed an oversubscribed $500,000 private placement at US$0.50 per unit with Colombian and Brazilian investors. The confidence shown by these well informed investors is very encouraging and the coming months promise to be exciting ones for Cosigo.
Dennis W Milburn
President & CEO
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