Vancouver – Right on cue, deep drilling at St. Elias Mines‘ (SLI-V) Jales/Gralheira property in northern Portugal has intersected the Gralheira vein system at over 500 metres depth in its first hole.
Although assay results are still pending, investors cheered the news, propelling shares in the junior up a whopping 34% on 15 times its average daily volume, to a 41-cent close.
Situated in the Tras-O-Montes region, the property covers 16.8 sq. km and hosts the past-producing Jales mine, as well as the Gralheira gold deposit some 700 metres to the north. Before closing in 1992, the Jales operation produced 830,000 oz. gold from material grading 12.9 grams gold per tonne.
Targeting one of eight high-priority geophysical anomalies, crews intersected three subparallel vein structures in hole K19 which they drilled to a depth of 529 metres. Boding well for future drill targeting, the vein intercepts occurred within metres of where geologists had predicted. The first vein was hit at 424.5 metres down-the-hole, the second at 457.7 metres and the third at 511.4 metres depth, 270 metres deeper than the previous deepest intercept in hole K18.
In 2002, St. Elias drilled 1,500-metres targeting the high-grade zones in the Gralheira deposit after signing an option deal with Kernow Resources and Developments (KRD-V).
St. Elias initially aimed to identify sufficient high-grade tonnage in an effort to get mining started in the near-term. It saw potential for an underground mine using narrow stope mining and a possible bulk mine near the juncture of the Jales and Gralheira structures. The company was working on defining a resource according to new guidelines.
The company appears to have shifted gears towards exploring for new zones after the results of a geophysical survey revealed several targets at much greater depths than previously anticipated.
In March, consulting firm Quantec completed five lines covering 12 line-km of TITAN 24 geophysical survey mainly over the Gralheira deposit. This type of survey measures DC resistivity, chargeability and magnetotelluric resistivity at greater depths than traditional induced polarization surveys.
The company pinpointed 25 drill targets, eight of which it considers first priority, the deepest being at 1,250 metres. The survey indicated good correlation to known high-grade gold bearing zones and indicated that the Gralheira mineralizing system extends down to at least 1,250 metres and mineralization in the Adit zone extends 500 metres further east.
St. Elias has commissioned a second diamond drill rig with wedging capability to assist in testing the remaining high priority drill targets from the TITAN 24 survey along the Gralheira system.
Following up on the three intercepts, hole K19A is a wedge designed to intersect the veins above the three found in hole K19 from around 250 metres down-the-hole.The company can earn up to 75% interest in the Jales/Gralheira project from Kernow.
Plans call for continued drilling over the next two months at a cost of just over $400,000 after which St. Elias will have vested its 51% interest.
The company will then have to spend another $2.5 million to earn the remaining 24%.
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