Rye Patch looks to bounce back with resource estimate

Rye Patch Gold (RPM-V) failed to tap into market support — which it enjoyed in April — with its latest news from the Lincoln Hill project in Nevada.

The company, which took a hit to its market cap after it learned that a subsidiary of Barrick Gold (ABX-T, ABX-N) was exercising its pre-emptive right to acquire Centerra Gold’s (CG-T) stake in the Ren gold project — killing an agreement for the stake between Rye Patch and Centerra — looked to turn the page by issuing its first National Instrument 43-101 compliant resource estimate for Lincoln Hill.

The wholly-owned project, 160 km northeast of Reno in west-central Nevada, is one of three key sites the company is exploring along Nevada’s emerging Oreana gold trend.

The study puts 17.2 million tonnes grading 0.69 gram gold per tonne and 17.4 grams silver per tonne for 380,000 oz. gold and 9.5 million oz. silver in the inferred category using a 0.343 gold equivalent cutoff grade.

Rye Patch’s president and chief executive Bill Howald said the estimate proves up the potential of the Oreana trend overall, as Rye Patch has already released estimates for its Wilco and Jessup projects.

“With Wilco, Jessup and now the Lincoln Hill resource estimates complete, the increased gold and silver resources suggest that the Oreana trend has significant potential and scale,” Howald said in a statement.

Together the Wilco and Jessup projects have 1.16 gold equivalent oz. in the measured and indicated category and another 2.1 million gold equivalent oz. in the inferred category.

The resource estimate for Lincoln Hill was based on 49 drill holes — 43 of which were reverse circulation holes.

Rye Patch describes the deposit as a stockwork zone at surface with high-grade feeder structures internal to the main mineralized body.

In Toronto on May 18 — the day the resource estimate was released — the company’s shares were off 5% to 18¢ on 184,000 shares traded on a day when the TSX Global Gold index was off a single percentage point as the price of gold fell US$6.10 to US$1,222.

Rye Patch shares had traded for as much as 34¢ in early April before the company announced that the Ren agreement had fallen through.