High Desert hits new zone at Gold Springs

High Desert Gold (HDG-V) said it would find new gold mineralization in undrilled areas below outcropping gold mineralization and now it has.

Results from the first six holes drilled on the Utah sided of its Gold Springs project are in and they were highlighted by three holes, one of which came from an entirely untested and new zone.

The first two holes came out of the Jumbo Resources zone — a zone that already has an inferred resource calculation — and they were highlighted by 26 metres grading 1 gram gold equivalent and 35 metres grading 1.01 grams gold equivalent.

The third hole from the new zone returned 29 metres grading 1.01 grams gold equivalent, and included a high grade interval of 1.5 metres grading 8.9 grams gold equivalent.

It was the first time High Desert has drill tested the area, which it calls Shark’s Mouth and it hopes that future drilling will show that mineralization there is semi-continuous with the Jumbo Resource area.

High Desert has a 60% stake in Gold Springs and is the operator, while Pilot Gold (PLG-T) holds the remaining 40% of the project which straddles the Utah and Nevada border.

The companies have drilled 18 of the 50 hole program for 2012, with 16 of the finished holes having been drilled in Utah while the remaining two were drilled in Nevada.

And while Shark’s Mouth returned some promising early results, the bulk of High Desert’s attention remains focused on an area roughly 500 metres to the north that is known as the Jumbo Resource area.

The Jumbo Resource area is the first of a string of zones being drilled in Utah with aim of seeing if the zones coalesce into a semi-continuous zone within an 8-km long high resistivity feature known as the Jumbo Extension.

The Jumbo Resource zone currently has inferred resources of 9.4 million tonnes grading 0.57 grams gold and 12.9 grams silver for a total of 173,000 oz. of gold and 3.88 million oz. of silver or 233,000 gold equivalent oz. at an average grade 0.77 grams gold.

The company’s next drill results will come out of two zones that are roughly 2-km south of the Jumbo Resource zone but still lie within the Jumbo extension. They are known as Shark’s Belly and the Etna zone and both remain on the Utah side of the project.

Over on the Nevada side, High Desert is currently drilling the Silica Hill target, an area in Nevada which includes a 100 gram per tonne gold outcrop.

Richard Doran, High Desert’s vice president, says the news flow over the coming months will come from results in Nevada. While early results showed higher grades on the Nevada side drilling there was held up by permitting issues. Those permitting issues are now behind it, and Doran says the company is intent on discovering new gold zones there.

High Desert came to its large 56 sq km position at Gold Springs through its vice president of exploration Randall Moore’s former relationship with the now defunct Cambior.

Moore was an exploration manager at Cambior when it began an exploration program on the ground roughly 10 years ago. When Cambior folded, Moore kept his eye on the ground that had been an old mining district back in the late 1800s, and eventually helped acquire it for General Minerals, which was a predecessor company to High Desert.

High Desert currently has $4 million in cash and a burn-rate of roughly $200,000 per month. Doran expects that’s enough capital to take High Desert through to a resource update on Jumbo at the end of the year.

Management holds just under 10% of the company’s equity.