San Lorenzo hits all-time high on Chile gold assays

San Lorenzo Gold (TSXV: SLG) soared to a record intraday high after the Canadian explorer said new drilling on the Arco de Oro target at its primary Salvadora project in Chile raises odds that the property contains several gold and copper systems.

Hole SAL-10-25 cut 102 metres grading 1.33 grams gold from 153 metres downhole, including 13 metres grading 2.21 grams gold from the same depth, San Lorenzo said Friday. Nearby hole SAL-09-25 cut 59 metres of 1.07 grams gold from 238 metres depth, including 11 metres of 3.78 grams gold from 270 metres downhole.

“These holes indicate the presence of a much larger system within the Arco de Oro trend than earlier thought,” exploration Vice-President Terence Walker said. “It would appear that we are penetrating the upper layers of a gold-rich mineralized porphyry copper-gold system which warrants immediate follow-up drilling.”

Shares of the company surged 58% to $4.83 Friday morning in Toronto trading, valuing San Lorenzo at about $496 million (US$365 million). The stock has quintupled since the start of the year.

Calgary-based San Lorenzo has emerged as one of the top performing junior explorers on the TSX Venture Exchange this year following a series of discoveries at Salvadora in northern Chile’s Atacama region.

Five targets

Salvadora, which covers more than 90 sq. km, sits about 15 km from Codelco’s long-producing El Salvador copper mine. Regional infrastructure includes roads, power and access to nearby mining services.

Arco de Oro is one of five porphyry and epithermal targets on the property. Earlier drilling at the Cerro Blanco target returned broad gold intercepts that helped attract investor attention and financing earlier this year.

In March, San Lorenzo raised about $20 million via a private placement to fund further exploration at Salvadora.

San Lorenzo has been steadily expanding its land position around the deposit. Two months ago, the company added 29 sq. km near Cerro Blanco by purchasing three claim blocks and signing an option agreement tied to the Rubi property.

According to San Lorenzo, Salvadora’s geological setting shares similarities with other Andean porphyry deposits in Chile. Management says the combination of broad mineralized intervals and multiple targets points to the potential for a large-scale gold-copper system.

Assays from additional holes at Arco de Oro are pending and drilling continues to test extensions of the mineralized system, San Lorenzo says. Mineralization remains open in all directions.