Snowline hits more gold beyond resource edge at Valley

Drill results from Snowline Gold’s (TSXV: SGD; US-OTC: SNWGF) Valley deposit continue to deliver wide intercepts of gold mineralization from surface at its Rogue project in the Yukon.

Drillhole V-24-095 returned 604.5 metres grading 0.65 gram gold per tonne from surface, including 160.5 metres of 1.13 grams gold from 168.5 metres, with the bottom 189.5 metres of interval outside the current resource estimate, the company reported Wednesday.

Hole V-24-096 cut 386 metres grading 1.08 grams gold from surface, including 120.5 metres of 2 grams gold from 139 metres downhole, outperforming the mineral resource block model along its length.

The latest assays “upgrade our confidence in the initial mineral resource estimate, and they expand the physical limits of the mineralized system at Valley as we know it,” Snowline CEO Scott Berdahl said in a release. “It is exceptional to see such consistency across batch after batch of analytical results—and a hallmark of a top-tier gold deposit.”

Resource report tailwinds

In a note on Wednesday, SCP Resource Finance analysts wrote that Valley results keep outperforming the block model with both infill and drilling on the northeast and southwest fringes. That supports an improvement in tonnes and grade in the upcoming resource update, particularly in the shallow areas of the pit that were previously modelled as waste. 

They maintain their buy rating and a share forecast of $11 apiece.The company expects to update the resource estimate next year, incorporating the results from 25,099 metres drilled this year.

Snowline drilled its first-ever hole into the Valley target in September 2021 and released an initial resource last June  based on 28,000 metres of drilling. Indicated resources stand at 75.8 million tonnes grading 1.66 grams gold for 4.1 million oz. contained gold. Inferred resources add 81 million tonnes grading 1.25 grams gold for 3.3 million contained oz. gold. The resource used a cut-off grade of 0.4 gram gold.

The Valley deposit is a reduced intrusion-related gold system (RIRGS) and geologically similar to other RIRGS deposits now in production, such as Kinross Gold’s (TSX: K; NYSE: KGC) Fort Knox mine in Alaska.

Valley is just one of several targets at Snowline’s 112-sq.-km Rogue project, which hosts multiple intrusions (like Valley) along with widespread gold anomalism in stream sediment, soil and rock samples.

In November, assays from Valley included 380.4 metres grading 1.06 grams gold from surface, including 51 metres of 2 grams gold, in drillhole V-24-091, and 219.1 metres of 1.40 grams gold from surface including 72 metres of 2.11 grams gold in drillhole V-24-088.

Last year B2Gold (TSX: BTO; NYSE-AM: BTG) made a 9.9% strategic investment in the company.

Snowline shares traded at $5.31 apiece on Wednesday at mid-day, down 9¢ (1.6%). Over the last year the junior has traded in a range of $3.88 and $6.40 per share. Snowline has a market cap of about $841.7 million.