Probe Metals identifies 
shallow discoveries

Probe Metals (TSXV: PRB; US-OTC: PROBF) has found shallow gold mineralization at its Val-d’Or East project in northern Quebec.

The junior explorer reported to the market in August that expansion and exploration drilling had returned intercepts of 1.7 grams gold per tonne over 10.4 metres starting from 122 metres downhole and 4.1 grams gold over 3 metres starting from 219 metres downhole in hole PC-17-156, 200 metres south of the Main Zone at the New Beliveau deposit, and 700 metres south of the former New Beliveau mine.

Probe says the mineralization may represent the lateral extension of the main dike zone mined at Beliveau. The mineralization in the discoveries is also similar to the Beliveau deposit, and is characterized by sulphide-bearing, quartz-tourmaline veins associated with mineralized diorite dikes.

Probe’s wholly owned New Beliveau deposit — 25 km east of the city of Val-d’Or — sits beneath the past-producing Beliveau mine, which Cambior operated from 1989 to 1993. The mine produced 170,000 oz. gold at 3.15 grams gold per tonne.

“Being only 20 minutes from one of Canada’s more prolific gold mining camps, Val-d’Or is remarkably under-explored,” David Palmer, Probe’s president and CEO, told The Northern Miner. “Most of the areas we are exploring have never had any form of ground geophysics until we showed up, and all of our discoveries come from these first geophysical surveys. Now it is just a question of expanding the surveys over the rest of the project to see what else we can find.”

George Topping of Industrial Alliance Securities was impressed by the company’s latest news.

“Probe continues its record of having discoveries in every release, this time with shallow discoveries 200 metres south of the main New Beliveau deposit,” the research analyst said in a client note.

The drill hole, 200 metres south of the Main Zone, was one of 27 holes for which Probe released assay results on Aug. 16. Other highlights included the best drill intercept to date in the North Zone. That hole, 500 metres north of New Beliveau, returned an intersection of 2 grams gold over 59.9 metres at 100 metres deep, including an intercept of 8.2 grams gold over 7.2 metres.

Another cut 2.3 grams gold over 7.6 metres from 81 metres down-hole, underlain by 39 metres grading 2.5 grams gold starting at 217 metres downhole, prompting Topping to note that the “stacked nature” of the hole means the Lower Zone would have an economic, 3-to-1 strip ratio.

Topping said the latest drill results average 1.9 grams gold over 9.5 metres at 144 metres deep for open-pittable ore.

“An open-pit resource in the North Zone is possible, as illustrated by the intersection of 2 grams gold over 59.9 metres at 127 metres deep,” he wrote. “This is economic at the implied 2-to-1 strip ratio, and with thick width, would add ounces quickly.”

Drill results from the latest press release, he added, “average 1.9 grams gold per tonne over 9.5 metres at a 144-metre depth for open-pittable ore [for the starter mine, <300 metres] and 1.6 grams gold per tonne over 11.3 metres at 560 metres deep for underground ore. The average grade for drilling to date is 2.9 grams gold per tonne over 11.6 metres at 153 metres deep for open-pittable ore and 4.9 grams gold per tonne over 5.4 metres at 468 metres deep for underground ore.”

Probe has drilled more than 47,500 metres of its 75,000-metre drill program this year and identified the New Beliveau deposit mineralization over an expanded area of 650 metres by 450 metres, to more than 900 metres deep.

“The results have been exactly what we hoped for and show continuity within the mineralized system,” Palmer said. “Not only should we be able to expand the boundaries of the previous resource block model but we are now seeing this mineralized trend over kilometres of strike length, and this gives the potential for multiple zones, like the discoveries to the south.”

Probe expects to finish an updated resource estimate before the end of the year.

“In addition to pushing out the boundaries of the current 43-101 resource, I hope that some or all of these discoveries can be included in the updated resource estimate,” Palmer said.

The deposit hosts an inferred resource of 9.1 million tonnes grading 2.63 grams gold for 770,000 contained oz. gold. The resource, completed in November 2012, was based on a cut-off grade of 1 gram gold from surface to 350 metres deep, and a cut-off grade of 1.5 grams gold at 350 metres deep. The resource includes the New Beliveau, Highway and North Zones.

Recently, Probe finished an induced-polarization geophysical program covering more than 500 line km on the Val-d’Or East property. The survey is the first large geophysics undertaken over the Pascalis gold trend and surrounding areas, Probe says. Processing is underway and the company plans to drill select targets.

“Concurrent with the resource drilling, we are advancing the regional exploration on the rest of the project area with the goal of generating drill-ready targets through this fall, for fall and/or winter drill programs,” Palmer said. “In such an underexplored part of the Val-d’Or camp, this could turn out to be a really exciting part of our overall program.”

At press time Probe’s shares were trading at $1.62 within a 52-week range of 99¢ to $2.18.

Topping has a “speculative buy” rating on the stock and a $2.50-per-share target. “As seen in the acquisition of Integra Gold by Eldorado Gold, there is clear appetite for Val-d’Or assets, should a viable resource be proven.”

Tyron Breytenbach of Cormark Securities has a “buy” rating and a $2.15-per-share target.

Goldcorp (TSX: G; NYSE: GG) owns a 13.8% stake in the junior.