The initial resource estimate for US Gold’s (UXG-T, UXG-X) El Gallo silver discovery in Sinaloa state, Mexico, tallies up to 25.1 million oz. silver and 21,000 oz. gold under the measured and indicated categories.
Those resources are contained in 7.4 million tonnes averaging 106 grams silver per tonne and 0.09 gram gold per tonne.
There are also inferred resources at El Gallo of 4.5 million tonnes grading 84 grams silver and 0.06 gram gold for 12.2 million oz. silver and 9,300 oz. gold.
Most of the resources are no deeper than 100 metres and the estimate is based on nearly 30,000 metres of drilling.
US Gold aims to drill a total of 100,000 metres at El Gallo this year as it also puts together a preliminary economic assessment, or scoping study, on the project. The company says mineralization is still open in several directions.
El Gallo is a low sulphidation epithermal system with a lot of breccia in the system. That means there aren’t the typical vein systems often seen throughout Mexico. The host rock is andesite and the thickness of the host rock varies throughout the project from a minimum of 100 metres to about 220 metres along strike.
The El Gallo deposit is located in the Magistral silver district about 5 km north of the past-producing Magistral open-pit gold mine and 11 km northwest of the Palmarito silver mine. Palmarito was the biggest silver producer in the state, with about 15.3 million oz. silver and 49,000 oz. gold mined up until 1950.
The scoping study will look at shipping gold and silver ore from Magistral and Palmarito to a processing facility at El Gallo.
Magistral has measured and indicated resources of 11.5 million tons grading 0.04 oz. per ton for 502,000 oz. gold
The company reached a 52-week high of $5.63 in late June and a low of $2.16 in February. Its market cap is $549.7 million.
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