It didn't take Probe Mines (PRB-V) long to prove to the world that its decision to sell a royalty on one past producing mine to invest more into a potential mine was a sound decision.
Two weeks ago, Probe announced it was selling its royalty on the Goldex project near Val D'Or to Agnico-Eagle Mines (AEM-T, AEM-N) for $18 million and would put the new found capital to work at its Borden Lake project.
Such confidence in the property, which sits only 9-km east of the town of Chapleau in Northern Ontario, looks justified with the release of the best results yet, as drill hole number 256 returned an intercept of 51 metres with an average grade of 10.3 grams gold.
The hole was drilled 1,200 metres to the southeast of the deposit's discovery hole and extends mineralization to depth towards the edge of the current resource envelope. This opens the possibility of finding similar grades as Probe continues with its step-out drill program.
Mineralization was struck at roughly the 350 metres level, which the company says could still be in the realm of an open pit. It currently envisions a pit that goes down to roughly 425 metres. Probe added that the plunge may make strip ratios too high under an open pit scenario.
Kwong-Mun Achong Low, an analyst with Jennings Capital, said the latest results could point to new opportunities for the company.
"Overall, we view this high grade hit as adding another dimension to Borden Lake exploration potential beyond the low-grade bulk tonnage model," he wrote in a research note. "Further high grade hits to the southeast may beg the question of underground mining potential, though we stress that it is still early days."
The deposit sits within the Kapuskasing Structural zone, roughly 150-km north west of Iamgold’s (IMG-T, IAG-N) Cote Lake deposit and has indicated resources of 176.96 million tonnes grading 0.71 grams gold and 0.7 grams silver for 4.05 million oz. of gold and 3.8 million oz. of silver. Inferred resources come in at 90.8 million tonnes grading 0.62 grams gold and 0.7 grams silver for 1.8 million oz. of gold and 1.96 million oz. of silver.
Those numbers were generated using a cut-off grade of 0.3 grams gold. But when the cut-off grade is raised to 0.6 grams and the resources are constrained to within a conceptual pit, the Global gold resources (including both indicated and inferred) come in at 3.4 million oz.
The company released 25 holes from the Borden Lake Project including six step-out holes, 14 holes testing hanging wall zones to the main mineralization and five infill drill holes.
Overall, the drilling, excluding holes with no significant results, had a weighted average intercept of 22m at a weighted average grade of about 2.2 g/t gold. Excluding this single intercept, the results averaged about 1.4 g/t gold over 15.7m, higher than the average to date of 1.0 g/t over 11.3 metres.
The high grade mineralization was not intercepted on nearby holes on the same section or up dip; however, there appears room for it to extend at depth.
Probe plans on doing infill the area likely early in January as part of its third resource estimate update and a preliminary economic assessment. Metallurgical results and a resource update are expected in the coming weeks. Word of the intercept helped lift the company's market cap by nearly 5% and its shares closed at $2.04 in Toronto on Dec. 13 on 969,000 shares traded.
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