War Eagle soars on drill results from Idaho bet

Additional drill results are awaited from the War Eagle Mountain property of War Eagle Mining Company (VSE) in southwest Idaho. Not only has the discovery been heavily promoted by the company but also the expectation of favorable results in a step-out drilling program.

Investor’s appetites were tantalized by hole 16-2-A which returned 0.16 oz gold and 1.6 oz silver over a 275 ft interval beginning at a depth of 425 ft. The hole terminated in mineralization.

From Oct 26 to Nov 1 the price of the company’s shares rose $2.75 to close at $4.35 on volume of 5,259,100.

The market simply ignored the fact that it was a 10 ft step out from hole No 16-2 which assayed 0.114 oz gold over 75 ft beginning at a depth of 165 ft.

Hole No 16-2-A intersected highly altered volcanic sediments from 230-675 ft of which 245 ft (425-670 ft) fire assayed 0.163 oz gold and 1.6 oz silver. The hole intersected and remained in granite rock from 675 ft to total depth of 700 ft.

War Eagle says the granite fire assayed 0.13 oz gold and 1.1 oz silver over 25 ft with the last 5 ft assaying 0.23 oz gold and 1.9 oz silver. The volcanic sediments, some of which are carbonaceous, have been tested 3,000 ft to the north by drilling. One shallow hole in this area returned 5 ft of 0.62 oz gold.

Step-out drilling is taking place on 100 ft centres around 16-2A to the north, south, east and west. Some longer step-outs (400 ft) are being drilled as well and assay results for a few holes are expected shortly. The dimensions of the grid are now 1,200 ft in a north-south dimension and 900 ft east-west.

A 10,000 ft reverse circulation drill program has started and “mineralized quartz latite and volcanic sediment units” have been encountered in the holes, the company recently stated publicly.

Donald Scott, a consultant for War Eagle, says the latite/quartz- latite thicknesses vary from 70 to 270 ft and the sediments from 140 to 500 ft. He conceded they still don’t know the attitude of the zone and whether there is any open pit potential.

Vancouver-listed Del Norte Chrome has muddied the waters somewhat by claiming to have oral agreements with War Eagle for the Northern Eagle and Owyhee claims groups which are contiguous and to the north of War Eagle’s discovery. War Eagle says it will “vigorously defend any legal action w hich may be initiated by Del Norte with respect to the alleged agreements.” The claims in dispute are completely separate from the War Eagle discovery.