Corvus hits more high-grade at new Bullfrog target

VANCOUVER — The latest drill result from the Yellow Jacket target at Corvus Gold‘s (KOR-T) North Bullfrog project in Nevada has returned more evidence of a high-grade feeder zone.

The stand-out interval in hole 12-138 was 5.4 metres grading 16.2 grams gold per tonne and 1,218 grams silver per tonne from 89 metres depth. After a roughly 13-metre gap the hole encountered 2.1 metres averaging 5.4 grams gold and 153 grams silver, and then another 15 metres down hit 4.4 metres carrying 1.9 grams gold and 2.6 gram silver.

The high-grade intervals from the Yellow Jacket target occur within quartz-veined hydrothermal breccia with elevated selenium and tellurium values. The company notes that the elevated values are similar to the high-grade mineralization at the historical Bullfrog mine some 10 km to the south, and that high selenium values are an important indicator at the Ken Snyder deposit in northern Nevada.

The latest hole sits outside the current in-pit resource outlined in a late-February scoping study on the project. The study outlined a 44,000-tonne-per-day open-pit mine producing 57,700 oz. gold per year for 13 years. Based on US$1,300 per oz. gold and using a 5% discount rate, the financials worked out to a net present value of US$118.3 million and an internal rate of return of 28.8%.

Total initial capital costs came in at US$68.8 million, while cash operating costs were US$815 per oz. gold. Average heap leach gold recovery was 69% and the strip ratio was estimated at 0.41:1.

The study was based on an in-pit resource of 19.5 million indicated tonnes grading 0.32 gram gold for 199,000 oz. gold, plus 123.3 million inferred tonnes grading 0.23 gram gold for 890,000 oz. gold. The resource covers the Mayflower, Sierra Blanca, Jolly Jane and Connection targets but not Yellow Jacket.

Other recent higher-grade drill results from the Yellow Jacket target include hole 126 that returned 11.4 metres grading 4.02 grams gold, hole 127 that cut 13.5 metres grading 2.18 grams gold, and 6.1 metres grading 11.9 grams gold.

The company reports that five diamond drill holes along the Yellow Jacket structural corridor have intersected an extensive structural zone with multiple styles of gold mineralization including both quartz veining and pyrite replacement of iron-rich lithologies. The latest hole shows a different style of quartz veining, associated with multistage hydrothermal breccias. Corvus notes that this high-grade zone shows evidence of very active boiling at depth, which indicates the possibility of more elevation controlled high-grade mineralization at depth.

Overall Corvus controls 43 sq. km at its North Bullfrog project in southern Nevada. The company also holds properties in Alaska and northern Quebec. International Tower Hill Mines (IHT-T) spun out its exploration properties into Corvus in August 2010. AngloGold Ashanti (AU-N) still holds a 12.55% stake in Corvus.

The company is led by Jeff Pontius as CEO, who was previously North American exploration manager for AngloGold and project manager for NERCO Mineral Co. He was involved in discovering the Elder Creek and Yankee mines in Nevada, the Crippe Creek mine in Colorado, and Tower Hill’s Livengood deposit in Alaska. He is joined by Russell Myers as president, who served as Tower Hill’s VP of exploration before its properties were spun out into Corvus, and Carl Brechtel as manager of project development, who previously served as president and COO of Tower Hill and pre-feasibility manager at AngloGold. Mark Reischman, the company’s Nevada exploration manager, was a key member of the Bullfrog District evaluation team while at Barrick Gold (ABX-T, ABX-N).

Corvus’ share price jumped as much as 8¢ on the latest news before closing up 2¢ at 85¢. The company has a 52-week share price range between 47¢ and 98¢. Corvus recently closed a $5.5-million private placement at 67¢, with over 50% taken by management and insiders. The company has 41.7 million shares outstanding.