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 positive news from its Taylor gold project near Timmins, Ont. Taylor sits 65 km west of the company’s newly producing Holt gold mine, and 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. 

The Holt mine, which started commercial production in April, is one of the three that St Andrew now has in production, 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 within the larger Abitibi greenstone belt. 

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

Highlights include: hole 11 carrying 5.85 grams gold per tonne over 21.6 metres, including a 0.5-metre intersection grading 122.50 grams gold; hole 14 returning 12.22 grams gold over 8.4 metres, including 0.5 metre at 155 grams gold; and hole 15 grading 43.1 grams gold over 6 metres. 

Specks of visible 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 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 a half-million ounces. 

A 2006 resource estimate by Scott Wilson showed the two zones contain 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 West Porphyry, and aims to wrap it up by early August. 

When it does, the company hopes to better understand the resource’s shape and gold distribution. 

Following that, Ramcharan says St Andrew plans to internally calculate a resource on the project and publish 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 drilling and technical work this year. 

“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. “We just have to dewater and then continue the ramp access down to the zones we are going to hit first,” Ramcharan said. 

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 the bank. 

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

St Andrew shares dropped to 76¢ on June 22, after touching a high of $1.71 on Sept. 20, 2010.
It has 368 million shares outstanding.