Newstrike hits Ana Paula at depth

VANCOUVER — Vancouver-based explorer Newstrike Capital (NES-V) remains hard at work at its wholly-owned Ana Paula gold-silver project in Guerrero State, Mexico. After releasing Ana Paula’s maiden resource in late March — which established the project as a multi-million ounce gold deposit with open-pit potential — Newstrike is forging ahead with a $15 million exploration program in 2013.

Newstrike’s first order of business was a series of holes that were designed to chase potential extensions of the deposit at depth. Back when Ana Paula’s resource was released the company explained that there remained a number of “pod-like bodies in the lower part of the breccia zone”, which lay beneath and adjacent to the cone pit and could prove to be economic underground mining targets.

Newstrike punched hole 13-162 down plunge of the breccia zone in an attempt to determine its depth extent and establish a strategy for later drilling across the structural grain. The company notes that the intersections below the 375-meter level down-hole are outside its open-pit resource.

Newstrike cut a number of intervals that seem to establish Ana Paula’s potential at depth, including: 133 metres grading 1.48 grams gold per tonne from 417 metres down hole, and 25 metres averaging 1.07 grams gold from 740 metres depth. Newstrike also continued to firm up its model of the breccia pipe, cutting 215 metres of 3.29 grams gold and 6.8 grams silver per tonne from surface. The results represent roughly 67% of the hole — drilled to a total depth of 1,400 metres — which bottomed out in mineralization.

Newstrike also released assays from hole 12-137, which is part of a number of in-fill holes aimed at improving the company’s mineral confidence within the pit, as well as to test an area above and west of the known breccia zone. 

The company continue to confirm Ana Paula’s high-grade extensions within its pit design, with highlights including: 207 metres grading 1.88 grams gold and 2.7 grams silver from 160 metres down hole; and 144 metres grading 2.57 grams gold and 2.8 grams silver from 224 metres down hole, which included a higher-grade intercept of 48 metres grading 5.45 grams gold and 4.1 grams silver.

Newstrike continues to have five drill rigs at the Ana Paula site, with a focus on potential extensions of its north-south mineralized corridor, as well as potential targets on the western portion of the property. The company has also mobilized a single rig to its Aurea Norte project, which is an earlier-stage site just north of Ana Paula. Newstrike is continuing with metallurgical testing, including further grind and flotation optimizations studies aimed at obtaining overall gold recoveries of 85% or greater, and improving silver recoveries.

Newstrike reported cash and equivalents totalling $28.5 million dollars to start the year, and maintained 115 million shares outstanding at the time of writing for an $80 million market capitalization. The company has traded within a 52-week range of 70¢ and $2.69, and has lost roughly 65%, or $1.33 per share, since early January.