TerraX up 26% on assay-less Newfoundland drilling update

TerraX Minerals (TXR-V) has released its second assay-less drilling update in less than a month from its Stewart gold-copper project in the Burin Peninsula of Newfoundland. Shares of the company climbed 8¢ or 26% on the news, closing at 38¢ on Sept. 14 on record-high volume of 1.06 million shares.

TerraX has now completed its second drill hole at the Stewart property, collared 1.7 km northeast of the first hole but still “along the strike trend of the mapped alteration on surface.” It says the hole is targeting a large, buried Titan induced-polarization survey anomaly.

Though assays have yet to come back from the lab, TerraX says the second hole intersected “porphyry-style alteration with significant sulphides” from a downhole depth of 172 metres to the end of the hole at 585 metres. The hole ended still within the zone of alteration and sulphides, reports TerraX.

The Vancouver-based company started a 2,500-metre drill program at Stewart in mid-August to test what it calls “Oyu Tolgoi porphyry style gold-copper mineralization” found on the property. It says sampling, as well as induced polarization and airborne magnetic surveys, have identified a mineralized system target up to 1.4 km wide and 6 km long.

In another assay-less drilling update on Aug. 25, TerraX said the first hole “intersected an extensive porphyry style alteration zone with significant sulphides over 433 metres.” The hole was testing a Titan 24 section line containing a 250-metre-wide-by-300-metre-deep chargeability anomaly that intersects the surface.

The company proclaimed at the time, “TerraX is encouraged by the presence of strong alteration to a vertical depth of 307 m in this location and by the apparent close correspondence between sulphide distribution and the Titan chargeability anomaly. This suggests that TerraX’s interpretation of a major porphyry system on the Stewart property is correct.”

Further on in both press releases, the company cautions readers that the presence of strong alteration and extensive pyrite development “need not be indicative of significant quantities of gold or other metals and that, prior to receipt of assay results, no conclusions can be drawn as to the nature or extent of any metal content.”

As for the comparison with Ivanhoe Mines‘ (ivn-t, ivn-n) massive Oyu Tolgoi gold-copper deposit in Mongolia, which contains approximately 81 billion lbs. copper and 46 million oz. gold in measured, indicated and inferred resources, TerraX has this to say. “It has been recognized that the Stewart property’s sheeted and stockwork quartz veins, and its widespread advanced argillic alteration with low grade gold and copper values, is similar to other large porphyry systems where advanced argillic alteration closely overlies porphyry mineralization, such as at Oyu Tolgoi in Mongolia (1.39 billion tonnes at 0.93% copper and 0.37% gold). Exploration below the advanced argillic zone in search of this style and size of deposit will be a primary target for TerraX on the Stewart Property.”   

TerraX optioned a 100% interest in the Stewart property in June 2010 from Nathaniel and Michelle Noel in exchange for $105,000 cash, 295,000 shares and $525,000 spent on exploration, all in stages over four years. The initial first year payment comprised $10,000 and 30,000 shares, clearly a bargain-basement price for any ‘Oyu Tolgoi style’ target.

TerraX is led by geologists Joseph Campbell as president and Dr. Tom Setterfield as vice-president of exploration. The director with the most shares, however, at 560,000, is Stuart Rogers. He is currently president of MAX Resource (mxr-v) as well president of West Oak Capital Group, a private Vancouver-based resource investment company. Terrax has 25.3 million shares outstanding, 34 million if fully diluted, and a 52-week range of 16¢-49¢.