Drilling by Palmarejo Gold (PJO-V) has intersected a winning combination of high grade gold and silver at its Palmarejo-Trogan project, 420 km southwest of Chihuahua, Mexico.
Drilling is highlighted by two holes in particular: one cut 8.9 metres grading 71 grams gold and 3,728 grams silver per tonne, while the other intersected 12 metres grading 19 grams gold and 1,395 grams silver per tonne.
These holes both cut the northwest-striking La Blanca quartz vein breccia. High-grade was also cut in the west-northwest-striking La Prieta zone. Both zones dip southwest. Stockwork mineralization is found at the intersection of the two structures.
Other high-grade La Blanca intersections cut by reverse-circulation holes include: 9 metres grading 3.6 grams gold and 873 grams silver per tonne; 10.6 metres grading 3.1 grams gold and 436 grams silver; and 7.6 metres grading 4 grams gold and 403 grams silver per tonne.
Drilling at La Prieta is highlighted by a reverse-circulation hole, which cut 6 metres grading 3.8 grams gold and 468 grams silver per tonne from surface in the footwall stockwork. Another RC hole cut the hanging wall stockwork, intersecting 9 metres grading 3.6 grams gold and 504 grams silver per tonne at 93 metres downhole.
A delineation drill program is firming up an inferred resource which was estimated last year at 21 million tonnes grading 1.75 grams gold and 191 grams silver per tonne.
This estimate was calculated using a 1-gram gold-equivalent cutoff, where 65 grams silver was estimated to be equivalent to 1 gram gold. This was based on a gold price of US$375 per oz. and US$5.77 per oz. silver.
The company is drilling the Rosario clavo (high-grade shoot) at 20-metre centres to firm up a resource capable of sustaining the first two years of an open pit operation. Recent intersections from two RC holes include: 7.6 metres grading 5.3 grams gold and 444 grams silver at 151 metres downhole; and 12 metres grading 4.5 grams gold and 459 grams silver per tonne at 128 metres downhole.
Drilling is ongoing, with the object of defining the known high-grade shoots to at least an indicated resource status. Three reverse circulation drill rigs and three diamond drill rigs have been testing the Palmarejo area.
Two drills have been relocated to test the Guadalupe zone, seven km to the south.
Assays are pending for a number of holes.
Geotechnical work has begun; metallurgical tests are ongoing and detailed design work for a processing facility will begin shortly. A draft of documents required for the environmental permitting application has been completed. Community consultation and negotiation are underway.
Shares in Palmarejo climbed 12% on June 15 to close at $2.02 following the release of drill assay data.
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