Disappointing drill results from the Tesoro gold project in Peru sent St. Elias Mines (SLI-V) shares tumbling on Wednesday.
Just a day after releasing the results the market announced its verdict in resolute fashion as St. Elias shares were one of the most actively traded on the Venture Exchange in Toronto on Jan. 11. The sell-off of the company’s shares reduced its share price by 40% or 58¢ to 84¢ on 7.4 million shares traded.
Results came out of 11 diamond drill holes, totaling 4,374.50 metres, and while grades were strong the intervals were narrow.
Of the results released only one hit the 1 metre intercept level and it graded 1.05 grams gold. Other intercepts included 0.74 metres grading 23.5 grams gold and 0.43 metres grading 9.438 grams gold.
And those narrow widths don’t even reflect true widths.
The company pointed out that not all of the assays from the drill program have yet been received but it also said it is currently re-sampling results and will do metallic screening and re-assaying of high grade intercepts in an attempt to qualify a suspected nugget effect on chemical assays.
Despite the lackluster results the company is forging ahead with its drill program at the property. After a break over the Christmas Holidays it is set to receive a second diamond drill rig at the site.
Tesoro is wholly owned by St. Elias and covers roughly 70 sq. km. The project sits on the prolific Nazca-Ocona gold belt parallel to the Pacific coast of southwestern Peru.
Gold at the project is associated with disseminated sulphides that seeped into quartz veins and fractures within the intrusive body. St. Elias has identified five mineralized zones at Tesoro and has done underground exploration and development work on three of these veins: C1, C2 and A4.
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