St Andrew gets a lift from Taylor

St Andrew Goldfields‘ (sas-t) shares got a much needed boost, springing almost 8% on the back of some positive news from its Taylor gold project near Timmins, Ont.

The Taylor project, sitting 65 km west of the company’s newly producing Holt gold mine, covers 15.4 sq. km.

“We are looking at Taylor as the next project to hit the development line,” says manager of investor relations, Suzette Ramcharan, noting the company currently has three producing gold mines.

The Holt mine, which started commercial production in April, is one of the three that St Andrew placed online, along with the Holloway mine in late 2009 and the Hislop mine in the third quarter of 2010.

All three mines sit in the Timmins camp, where the company holds a 120-sq.-km land package and is exploring a handful of projects. The camp lies within the famous Abitibi greenstone belt.

The Taylor project is the company’s most advanced exploration property and is set to see 15,000 metres of drilling this year, of which St Andrew has completed about 7,000 metres so far. And the results have been nothing but pleasing.

Highlights included hole 1 carrying 5.85 grams gold per tonne over 21.6 metres, including a 0.5-metre intersection grading 122.50 grams gold. Hole 14 returned 12.22 grams gold over 8.4 metres, including 0.5 metre at 155 grams gold. Hole 15 graded 43.1 grams gold over 6 metres, including a 0.5-metre intersection of 185.5 grams gold.

Specks of gold were reported in all of the recently released holes. The company says that the results are in line with last year’s drilling and confirm the presence of higher grade lenses. It also notes that the drilling continues to punch into the recently discovered Footwall zone.

The company intersected the Footwall zone about 60 metres below the known West Porphyry zone at the start of the second round of drilling in March. The zone extends westwards onto the Bourgeois claim along a 600-metre strike. It varies in thickness from 2 metres to 25 metres, and is open in all directions.

The two known deposits at Taylor are the West Porphyry deposit and the Shoot zone. Together, they host a combined gold resource of about half a million ounces.

A 2006 resource estimate by Scott Wilson showed the two zones contained 1.4 million indicated tonnes grading 7.6 grams gold for 343,000 oz., and another 216,000 oz. in inferred based on 737,000 tonnes at 9.1 grams gold.

St Andrew is focusing the current drill program on the West Porphyry zone, with aims of finishing up by the end of July or early August.

When it does, the company hopes to have gained a better confidence in the shape of the resource and a greater understanding of the gold distribution at Taylor.

Following that, Ramcharan says St Andrew plans to do a revised internal resource calculation on the project with a goal of publishing a prefeasibility study by year-end.

At the European Gold Forum in April, Jacques Perron, president and CEO, said he was “very encouraged” by the results coming from Taylor and would like to complete all the drilling and technical work on Taylor this year. So, come year-end, the company would decide how best to advance the project.

“We think we’ll be going underground next year with the intent of bringing Taylor into production by the end of 2013,” he said.

Ramcharan adds it’s just a matter of finalizing the mine plan before the company can put the project into production. She says the company is looking to use the existing ramp at the property to access the ore. “We just have to dewater and then continue the ramp access down to the zones we are going to hit first.”

Once in production, Taylor is expected to produce 30,000 oz. gold a year.

St Andrew has a 2011 exploration budget of about $10 million. Part of that was funded by last year’s $28.9-million financing and the rest by cash on hand.

At the end of March, the company had a little more than $29 million in its kitty.

On news of the drill results, the company’s shares moved up 6¢ to close at 86¢.

St. Andrew shares dropped to a low of 76¢ on June 22, after touching a high of $1.71 on Sept. 20, 2010. It has about 367.8 million shares outstanding.