Labrador Gold’s shares gain on best grades cut at Kingsway to date

The Toronto-quoted equity of Labrador Gold (TSXV: LAB; US-OTCQX: NKOSF) closed 4% higher on Thursday after reporting the highest-grade intercepts to date from the flagship Kingsway project in Newfoundland.

The company reports that hole K-22-174 intersected 284.1 grams per tonne of gold over 0.58 metres from 309.47 metres depth, and 15.05 grams per tonne over 1.11 metres from 310.71 metres depth.

The hole is the furthest hole drilled to the southwest at Big Vein and represents a 120-metre step-out from previously reported mineralization at Big Vein.

Mineralization at Big Vein remains open along strike to the southwest and northeast.

Drilling also intersected high-grade mineralization at Golden Glove, grading 20.07 grams per tonne gold over 1 metre from 355 metres downhole, and a longer 13.2-metre near-surface interval at Midway grading 2.2 grams per tonne gold that included 5.23 grams per tonne over 4 metres.

President and CEO Roger Moss said that the highest grade intercept comes from the furthest hole drilled to the southwest at Big Vein. This suggests the excellent potential for further high-grade mineralization as the program continues to the southwest.

“It attests to the prospectivity of the Appleton Fault Zone in this area,” said Moss in an exchange filing.

The company interprets the high-grade mineralization intersected at Golden Glove down plunge from that found in the first hole as encouraging, given that these holes are about 160 metres south of the discovery outcrop. “We will continue to test the extent of this mineralization both down plunge and along strike,” said Moss.

Drilling at Midway demonstrates near-surface gold mineralization in gabbro, which is significant given the extent of gabbro at Kingsway. “We expect to continue to successfully expand these three targets and begin drilling new targets, such as our current drilling at CSAMT, in the months ahead,” said Moss.

LabGold is drilling a projected 100,000 metres targeting high-grade epizonal gold mineralization along the Appleton Fault Zone with encouraging results. The company has about $26.5 million in working capital and is well funded to carry out the planned program.

LabGold announced in May that it had exercised early its option to earn 100% interest in the Kingsway project.

The move follows the discovery in May of a second mineralized trend at the Midway target at Kingsway, with hole K-22-157 intersected 3.53 grams per tonne gold over 6 metres from 37 metres, including 5.71 grams per tonne over 3 metres in altered and sulphidized gabbro.

“This discovery at Midway, in addition to the gold mineralization at Cracker, opens up a potential second mineralized system at Kingsway,” said Moss at the time.

LabGold shares closed at 39¢ apiece, giving it a market capitalization of $65.9 million. LabGold’s equity is trading 76% lower over the 12-month frame.