Kirkland Lake soars on Macassa hole

Shares in Kirkland Lake Gold (KGI-T) soared as much as 84, or nearly 22%, to $4.74 in early trading in Toronto on July 11, after the junior said that a new high-grade intercept may represent a new discovery south of the No. 3 shaft at the Macassa mine in northern Ontario.

Hole 50-627 returned 2.3 oz. gold per ton over a core length of 90.4 ft., beginning 1,700.6 ft. downhole. When the interval’s high grades are cut to 3.5 oz. gold per ton, the average grade slips to a still impressive 1.16 oz. gold.

“This outstanding intersection either represents a significant new discovery or is part of the LK zone where the discovery hole returned 26 ounces of gold over 6.2 feet,” Kirkland Lake’s chief exploration geologist said Stew Carmichael said in a prepared statement.

Carmichael explains that the interval exhibits “good continuity of gold mineralization,” but that the true width will be significantly smaller than the core length in the angled (30 to 35) hole.

“This is one of the most important drill holes and intersections in the Kirkland Lake camp history,” he adds.

The mineralization comprises extensive quartz veining, flooding, and up to 15% finely disseminated pyrite, with very fine visible gold observed throughout. Future drilling will target a similarly mineralized (but sub-economic) 33.6-ft. interval beginning at a downhole depth of 1,460.9 ft. in the same hole. The company also plans to sink a wedge hole off the same set up to determine the orientation and true width of the zone.

Earlier this month, preliminary results from hole 627 suggested the presence of a north strike extension of the Lower D zone, returning 1.1 oz. gold (uncut) over a true width of 11.5 ft. That intersection lies 1,560 ft. north of the existing Lower D resource block.

The drilling is part of a three-year $21-million exploration campaign aimed at outlining a combined potential of 15 million tons of ore on the Main Break, Parallel Breaks and North South structures, such as the Lower D Zone, on the company’s land holdings.

So far, Kirkland has identified four north-south structures at Macassa.

By late afternoon the company’s shares had retreated slightly to $4.26; trading volume was nearly 1.7 million shares, compared with a daily average volume of just more than 83,000 shares.