Murgor drilling hits gold but fails to impress market

The first hole completed by Murgor Resources (VSE) at its 14-claim Barry Twp. property in northwestern Quebec intersected gold mineralization. Market players, however, were less than impressed.

Hole MBA 95-1 intersected 0.1 oz. over 38.3 ft., starting at a downhole depth of 46 ft. The hole was collared 65 ft. southeast of the trench, where gold values were first reported, and was drilled to the northwest at a 45 angle.

On the day before results from the hole were made public, almost 1 million Murgor shares changed hands. The stock hit a daily high of $2.48 per share and subsequently tumbled 61 cents to $1.88 before being halted at the request of the Vancouver Stock Exchange.

A broker following the play told The Northern Miner that the stock dropped because “the market was expecting a grade of at least 0.3 oz.” Trading had resumed by presstime (on March 1) and, within a few minutes, the bid-ask spread had dropped to $1.25-$1.30. The broker added that he expected Murgor shares to go lower, “possibly dropping to a dollar per share.” David James, gold analyst with Canaccord Capital, was less pessimistic, expressing what might be termed a wait-and-see attitude: “One hole doesn’t tell the whole story, and we’ll wait for more results.” James suggested that, by March 3, assay results could be available from as many as three holes. He added that “we expect the shares to bottom out shortly and then turn around.” Murgor is currently drilling MBA 95-5, and the results of this and other holes are eagerly anticipated.

Some observers believe the narrower (46-ft.) assayed intersection also affected the price of the stock. Murgor originally reported the intersected interval as being 112 ft. wide. This has led some to suggest that the structure that hosts the zone may have an orientation different from what was previously thought. In any case, more drilling will be needed to determine the gold-bearing potential of the structure.

Murgor is carrying out geophysical work, and drilling will continue until spring breakup.

Meanwhile, activity in and around the Murgor discovery continues to flourish. Murgor affiliate Freewest Resources Canada (TSE) has initiated line-cutting and geophysical surveys on ground adjacent to Murgor’s discovery. Murgor holds a half interest in this ground and Freewest is earning the remainder. At the same time, junior Moss Resources (TSE) continues to make deals for land in Souart and Urban twps., and Montreal-listed Consolidated Oasis Resources has optioned the BarryOr property from Dufresnoy Industrial Minerals (ME) and Societe de development de la Baie-James.

Two affiliated companies, Noront Resources (VSE) and Blue Emerald Resources (VSE), have also optioned claims in Urban and Carpiquet twps. Vancouver-listed Fancamp Resources has staked 178 claims in Souart Twp. and plans to carry out geophysical surveys.

Other juniors active in the area include International Homestead Resources (VSE), Strike Minerals (CDN), Calco Resources (VSE), CopperQuest (CDN), Detector Resources (ASE) and Republic Goldfields (VSE).