Corvus hits more high grade at new Bullfrog target

The latest drill hole from the Yellow Jacket target at Corvus Gold’s (KOR-T) North Bullfrog gold-silver project in southern Nevada has returned more evidence of a high-grade feeder zone.

The standout interval in hole 12-138 was 5 metres grading 16.2 grams gold per tonne and 1,218 grams silver per tonne from 89 metres depth. After a 13-metre gap, the hole encountered 2 metres of 5.4 grams gold and 153 grams silver, and another 15 metres down hit 4 metres at 1.9 grams gold and 2.6 grams 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 high-grade mineralization at the historical Bullfrog mine 10 km south, and that high selenium values are an important indicator at the Ken Snyder deposit in northern Nevada.

The latest hole sits outside the in-pit resource tallied 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 each 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%.

Estimated initial capital costs are US$68.8 million, while cash operating costs are US$815 per oz. gold. Average heap-leach gold recovery is 69% and the strip ratio is estimated at 0.41 to 1.

The study is 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 comprises the Mayflower, Sierra Blanca, Jolly Jane and Connection targets, but not Yellow Jacket.

Other higher-grade drill results from Yellow Jacket include hole 126 that returned 11 metres grading 4.02 grams gold, hole 127 that cut 14 metres of 2.18 grams gold and 6 metres of 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 gold mineralizations, including quartz veining and pyrite replacement of iron-rich lithologies. The latest hole shows a different style of quartz veining, associated with multi-stage hydrothermal breccias.

Corvus notes that this high-grade zone shows evidence of boiling at depth, which could indicate more elevation-controlled, high-grade mineralization at depth.

Corvus controls 43 sq. km at its North Bullfrog project.

The company also holds properties in Alaska and northern Quebec. International Tower Hill Mines (ITH-T, THM-X) spun out its exploration properties into Corvus in August 2010, and AngloGold Ashanti (AU-N) still holds a 12.55% stake in Corvus.

Corvus is led by Jeff Pontius as CEO. He was previously North American exploration manager for AngloGold and project manager for Nerco Minerals. He was involved in discovering the Elder Creek and Yankee mines in Nevada, the Cripple 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 vice-president of exploration before its properties were spun out into Corvus, and Carl Brechtel as manager of project development, who previously served as president and chief operating officer of Tower Hill and prefeasibility manager at AngloGold. Mark Reischman, the company’s Nevada exploration manager, was a key member of the Bullfrog District evaluation team while serving 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.