Core Drilling More Than Doubles Grades For Oro Gold

VANCOUVER — It looks like Oro Gold Resources (OGR-V, OGRSF-O) will have to redo the resource estimate at its Trinidad gold project in Mexico now that diamond drilling is regularly returning much higher gold grades than did earlier reverse-circulation (RC) drilling.

A year ago, Oro Gold calculated a resource for Trinidad based on historic drill data from Eldorado Gold (ELD-T, EGO-X), a previous owner, and Oro Gold’s own RC drilling, which focused on delineating a new, higher-grade zone outside of the old Taunus pit and expanding old zones left open. The effort produced an inferred resource of 200,930 oz. gold, contained in 4.49 million tonnes grading 1.39 grams gold per tonne.

But now diamond drilling is returning significantly higher gold grades than did earlier RC drilling, even for twin holes. The first hole of the current program, hole 15, intersected 5.3 grams gold over 65.9 metres, starting 124 metres down-hole and included 7.6 grams gold over 42.5 metres. Over its mineralized interval, the grades in hole 15 varied between 1.7 and 15 grams gold.

Hole 15 was collared 10 metres south of RC holes 23 and 40, which returned 1.45 grams gold over 78 metres and 1.62 grams gold over 100 metres, respectively. The mineralized zones in these RC holes carried grades from 0.3 to 7 grams gold.

“This is the fourth diamond-drill hole within 10 metres of an RC hole in the new zone that seems to indicate a much higher gold grade, suggesting the RC drilling has been underreporting the grade,” says Oro Gold vice-president Frank Powell. “This is a significant development because our current resource at Taunus is calculated mainly from RC drilling.”

In its 2008 drill program, Oro Gold punched three diamond-drill and eight RC holes into the new zone. The diamond-drill core returned gold grades as much as four times higher than those from nearby RC holes. For example, core hole 12 assayed 8.5 grams gold over 61.1 metres; drilling problems forced it to stop 60 metres short of its intended depth and it ended in mineralization grading 11.3 grams gold. Hole 15, discussed earlier, was collared close by and returned a similar interval. But the two RC holes nearby, as mentioned, returned 1.45 grams gold over 78 metres and 1.62 grams gold over 100 metres.

Core hole 13, collared 100 metres north of hole 12, returned 5.29 grams gold over 23.6 metres, a grade roughly 50% better than that from the same interval in the RC hole it twinned. Similarly, hole 14 cut 7 metres of 9.7 grams gold followed by 7.8 metres of 5.3 grams gold; the core gold grades are 300% better than those from the corresponding RC hole intervals.

The Taunus gold target, which is part of the district-scale Trinidad property, is an oxidized, low-to-intermediate sulphidation epithermal vein system. Gold is hosted in multiphase stockwork veining and hydrothermal brecciation. The host rocks comprise a clastic unit, quartz-feldspar porphyry intrusive, and andesite volcanics; the clastic unit has proven difficult and slow to drill. But the mineralization appears to be fine-grained and in free form, with some core showing visible gold.

In the 1990s, Eldorado and partner Almaden Resources, now part of Almaden Minerals (AMM-T, AAU-X), defined a resource of 3.7 million tonnes grading 1.6 grams gold in what in now the Taunus pit. The partners mined the resource from 1995 until 1998, removing 51,690 oz. gold.

Oro Gold picked up the property, 110 km east of Mazatlan, in 2007 and found the new zone in 2008. The new zone has now been traced along 20 metres of strike, 100 metres depth, and up to 50 metres width; it is still open in all directions. Oro Gold has two drills turning on the project.

The company plans to complete 1,500 metres of drilling in the current program. The second hole, which also twinned an RC hole, intersected the mineralized zone some 20 metres below the hit in hole 15. Two other holes also testing the new zone are under way and are expected to expand the zone at depth and along strike. Another hole probed a near-surface anomaly roughly 500 metres south, on the edge of the old pit.

And the company should have the money to complete its exploration programs, having enjoyed success raising funds over the last year. In December, Oro Gold closed the second tranche of a private placement that brought in a total of $720,000. Then in April, the company closed another private placement, this time adding $2.03 million to the coffers. A follow-up placement added another $157,500.

Oro Gold shares recently traded at 75¢ in a 52-week trading range of 11.5-85¢. The company has 43 million shares outstanding.