Canamex soars 290% on high-grade intercept

Canamex Resources (CSQ-V) shares soared to new heights after releasing the best hole to date from its Burner gold-silver project in central Nevada.

The monstrous hole returned 118.1 metres grading 4.08 grams gold per tonne starting at 88 metres, which included a 1.6-metre interval assaying 132.5 grams gold from 138.6 metres.

While the latter intersection is being re-assayed to verify the gold and silver values, investors who were more than pleased with outcome sent Canamex shares up 290% to 39¢ apiece on heavy volume of 23 million shares traded.

The hole, which exceeds results from the historical database and the company’s previous drilling, indicates Burner may be hosting a deposit of “significant size and grade,” says Canamex.

“This drill hole intercept opens up a new exploration area and deposit type within the Bruner property,” the company’s chairman and CEO Greg Hahn said in a press release.

The hole, containing high gold values, breccias and hydrothermal quartz, points to a “very robust hydrothermal system,” Hahn adds.

The intercept is from the first hole of the company’s six-hole 2012 summer drill program. Canamex hopes the program will provide it with enough information to upgrade the property’s historic resource to a National Instrument 43-101 compliant estimate.  

The junior expects to release the remaining five holes on a one-a-week basis going forward.

The Burner property hosts a historical non-compliant resource of 385,000 oz. gold. The junior says Burner’s nearby historic Penelas vein produced about 100,000 oz. gold at an average grade of 0.56 oz. gold per tonne.

Two of the first three holes drilled by the company on the Penelas vein returned over 10 grams gold per tonne.

The company started drilling the Burner property at the end of last October and by March this year completed roughly 2,400 metres in 13 reverse-circulation drill holes. Standout hole from that batch cut 4.2 metres averaging 12.97 grams gold and 146 grams silver per tonne, including a 1.4-metre interval carrying 24.97 grams gold and 151 grams silver.

Canamex says it’s continuing with column leach tests on bulk samples from the historic resource area, where gold recoveries of up to 80% have been reached after 40 days.

The junior has an option to acquire up to 75% of the Burner property in Nye County, which consists of 98 unpatented and 21 patented mining claims covering about 8.5 sq. km.