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Drill results from Snowline Gold’s (TSXV: SGD) Valley target in Canada’s Yukon Territory have exceeded expectations and returned some of its highest grades yet, the company said Wednesday. Shares rose 5.5%.
Highlights from five drills include holes V-24-075 and V-24-073, the third- and fourth-highest ranking holes for contained gold at Valley, part of the larger Rogue project. V-24-075 cut 471.6 metres grading 2.38 grams gold per tonne, including 302.1 metres at 3.20 grams gold from 3 metres depth, and 22 metres grading 6.48 grams gold from 160 metres depth. Those results exceeded initial resource estimate projections by 18%.
V-24-073 returned 325 metres grading 2.57 grams gold, including 136 metres at 4.84 grams gold from 2 metres depth; and 33 metres at 7.08 grams gold from 55.5 metres depth.
“We had extremely high expectations for these latest holes at Valley, and they did not disappoint,” Snowline CEO Scott Berdahl said in a release. Based on the block model from the initial resource estimate, the company expected to drill 448 metres for about 2.1 grams gold in hole V-24-075, he said.
“We expect that this demonstration of robust continuity and of viability in our modelling will assist with de-risking and upgrading mineralization, and it could potentially help to expand our resource-limiting pit shell, pending additional results from our ongoing drilling at Valley.”
The results from the early season program come just two weeks after Snowline released similarly strong results from the first two drill holes of this year’s program that exceeded expectations of the initial resource block model grade predictions by 36%.
Snowline also published an initial resource for Valley in mid-June that shows the deposit is the largest in grade and contained metal in that portion of the Tombstone gold belt that stretches under the region.
Valley hosts 75.8 million indicated tonnes grading 1.66 grams gold for 4.1 million oz. of contained gold, and 81 million inferred tonnes at 1.25 grams gold for 3.3 million ounces.
In a research note on Wednesday, Canaccord Genuity analysts wrote that Snowline’s latest results show strong and consistent mineralization at Valley. They gave Snowline stock a speculative buy rating and a C$17.25 target price.
Company shares traded at C$4.20 apiece on Wednesday morning, valuing the company at C$662.2 million ($482m). Its shares traded in a 52-week range of C$3.88 to C$6.40.
With hole V-24-075, Snowline noted the gold grade continuity is a primary feature, with the highest grades near the surface, as with many holes drilled at Valley.
The hole exits the resource’s pit constraint and mineralization around 322 metres downhole, and outperforms the block model for that area by 140%.
In hole V-24-073, its 33-metre, 7.08-grams gold section is consistent with results seen in surrounding holes at Valley, demonstrating strong continuity in mineralization within that zone.
About 13,600 metres have been drilled at Valley in 28 holes this year, with visible gold and sheeted quartz vein arrays discovered within and outside the current resource.
The company has also completed the first stage of drilling a three-hole, 1,184-metre program at the Aurelius target, just northwest of Valley. Those holes contain clay and silica alteration and zones of brecciation cemented with pyrite and minor chalcopyrite, as well as pervasive oxidation down to 70 metres. Assays for those holes are pending.
Snowline is also preparing to drill for the first time the Sydney reduced intrusion-related gold system target at its Cynthia project, south of Rogue.
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