PC Gold’s ‘surprising’ find at Pickle Crow

VANCOUVER–PC Gold(PKL-T) has cut some very rich gold intercepts in a newly-discovered vein at its Pickle Crow property near Thunder Bay, Ont., and the news sent its stock price skyward.

The company has been exploring several vein structures at the historic mine with three drill rigs, but it is the recently discovered No. 19 vein that is causing the most excitement.

Kevin Keough, president of PC Gold, says that the new vein was a “total surprise.” The company stumbled upon the vein, which was hit at about 530 metres depth, as it was trying to drill below the much deeper historic workings of the mine.

“We’ve always said we want to drill this thing to as deep as 2,500 metres vertical from surface,” says Keough. The shock is that “it was in the top third of the deep hole that we had these surprising intercepts of what became the No. 19 ‘Golden Beast.'”

The company has released two drill results from the No. 19 vein. Hole W02 hit 13.1 metres grading 43.28 grams gold per tonne starting at 530.4 metres and included 4 metres averaging 138.89 grams gold. Hole W01 cut 7.6 metres grading 8.23 grams gold, including 1.8 metres grading 19.37 grams gold, starting at 492.5 metres.

“(The results) are exceptional when you multiply the grams by the metres,” says Keough. “That’s really what you’re looking for, and that’s a big number.”

The new vein is hosted in a porphyry body that was little explored outside the vertical workings of the mine in earlier operations.

“That discovery really opened our eyes to the possibility of more veins just like it, next to the workings,” says Keough.

Southeast of vein 19, the company continues to use a deep-capable rig to drill a mother hole and a wedge below a historic mine shaft No. 1, one of three historic shafts still accessible. In February, the company announced it had hit 3.2 metres returning 134.26 grams gold starting at 1,139.8 metres. The intercept was cut roughly 210 metres below the lowest level historically mined on this vein.

The company has been using a third rig to explore the No. 20 vein, which it discovered in January. Located southwest of shaft No. 1, the only result so far is 0.5 metre grading 20.96 grams gold from 126.5 metres down-hole, but more results are pending.

PC Gold has been intercepting gold throughout the property. In a 2009 drill program, the company hit 1.2 metres grading 112.15 grams gold in the No. 5 vein, located between shaft No. 1 and vein No. 20, and cut 0.3 metre grading 38.77 grams gold in the No. 11 vein, which runs parallel to the No. 5 vein.

“The basic objective is to prove that there is a lot of gold at Pickle Crow both in, around and below that old mine,” says Keough.

PC Gold was incorporated in late 2007 and went through an initial public offering in 2008 just before “all the wheels fell off,” as Keough puts it. The sole focus of the company has been to develop the Pickle Crow property, roughly 400 km northwest of Thunder Bay. Property ownership in the area used to be fragmented but PC Gold consolidated it and now has 100% ownership of 41 sq. km around the old mine. PC Gold acquired the property for $3.5 million, 9.5 million shares and 2.4 million share purchase warrants.

Keough says he is a year behind where he wants to be because the company had to halt most operations when the financial crisis hit and the company’s stock dropped from a dollar to a dime.

“When the markets collapsed, we did too. We basically shut everything down at that point and we sat for eight to ten months,” recalls Keough.

Since then it has been tough to get attention as a penny stock on the TSX, explains Keough.

“The point of the current exercise has been to get us established, to generate results that finally wake the market up, to make people realize that Pickle Crow remains what it always was, which is a great property,” argues Keough.

The mine was in production between 1935 and 1966, when it produced roughly 1.44 million oz. gold and 168,757 oz. silver from 2.8 million tonnes of ore. Then the mine became too deep to be financially viable at US$35 per oz. gold.

Mineralization at the property is associated with narrow high-grade, quartz-bearing carbonate veins hosted in metamorphosed mafic lavas and porphyry. Gold is also hosted in iron formations adjacent to vein structures.

The property is accessible by a gravel road. It has a 225-tonne-per-day mill from an earlier exploration program as well as electrical generators, office and dry trailers, fuel storage tanks, a tailings impoundment area and roughly 40 kmofunderground development.

In December, the company raised $6.95 million in a public offering of 5.1 million units and 4.2 million flow-through shares.

Keough is excited about the year ahead.

“We’re going to be drilling aggressively. . . The idea is to really pour the drilling into the property. What we want to do is to prove there’s a really large resource there,” he says. “I think that based on the latest results you can envisage taking this property up into the multi-million-ounce threshold with time and drilling effort.”

PC Gold’s share price was up 77¢ or 113% on a volume of 17 million in the two days following the latest drill results to close at $1.45. The company has a 52-week trading range of 42¢-$1.45 and 43.7 million shares outstanding.