VANCOUVER — Vancouver-based explorer Meadow Bay Gold (MAY-T) enjoyed a share jump and uptick in trading activity following a resource update at its wholly-owned Atlanta gold-silver project in Lincoln County, Nevada, that doubles the company's in-ground gold ounces.
Atlanta's updated resource marks the first time Meadow Bay has compiled results from roughly 10,300 metres of drilling it completed through 2011 and 2012, with an initial resource released in July relying solely on confirmation holes punched to confirm a historic resource delineated by Kinross Gold (K-T, KGC-N) in the late 1990s.
Meadow Bay paid US$6 million for 100% ownership in the past-producing Atlanta Mine back in 2011 and has been working to confirm mineralization in the historic pit, as well as expand its resource footprint by drilling on a target to the northwest where unusually thick widths were encountered in the Atlanta shear zone during 2011 exploration.
Atlanta's updated resource carries 15.5 million measured-and-indicated tonnes grading 1.05 grams gold per tonne and 10.8 grams silver per tonne for 683,600 oz. contained gold and 5.9 million oz. contained silver at a 0.4 gram gold cut-off. Further inferred resources total 18.5 million tonnes averaging 0.8 gram gold and 6 grams silver for 618,700 oz. contained gold and 3.96 million oz. contained silver.
“In the two years since Meadow Bay acquired the Atlanta Project we have more than doubled the resource,” commented CEO Robert Dinning, who pointed out that Meadow Bay has discovery costs running at below US$10 per oz. of gold. “Based on [the model], we are confident that we can build upon this resource through additional cost-effective exploration.”
Past operations focused on shallow, higher-grade portions of the Atlanta Fault zone, which separates tertiary-volcanic rocks from paleozoic-sedimentary rocks and strikes to the north and dips steeply to the west. From 1975 through 1985 the mine produced 110,000 oz. of gold and 800,000 oz. of silver through an 800-tonnes-per-day mill.
Meadow Bay intends to continue in-fill drilling around the old Atlanta mine, while also pursuing two priority exploration targets it has identified over the past two field seasons. The first is a newly-discovered intrusive porphyry that sits southwest of the historic pit, with gold and silver mineralization increasing in thickness around the margins of the intrusive.
Highlights from 2011 drilling at the porphyry target include: 62 metres grading 1.58 grams gold and 2.8 grams silver from 198 metres depth in Hole 11-04C; and 35 metres averaging 2.86 grams gold and 35 grams silver from 196 metres depth in Hole 11-09C.
A second, earlier-stage target is the Western Knolls that sit west of the historic mine. Scout chip sampling returned anomalous gold values and pathfinder elements. In addition, Meadow Bay completed induced polarization (IP) and magnetic surveys that revealed a large area of silicified and mineralized volcanic rocks underlain by shallow zones of IP chargeability.
In mid-January the company completed its plan of operations for an upcoming exploration program with the Bureau of Land Management. Meadow Bay's plan includes an additional 69 exploration drill pads, with many focused on the Western Knolls target. In-fill drilling at the porphyry is also expected to continue, with a preliminary economic assessment on the horizon.
Meadow Bay reported $529,865 in cash to end the third quarter of 2012 and closed a private placement for an additional $583,560 when it issued 1.9 million units at 30¢ each. Future capital raises could come in at a more competitive share price, however, as Meadow Bay shot up 27%, or 11.5¢, following news of its updated resource at Atlanta. The company closed at 54¢ at time of writing, and maintains 45 million shares outstanding for a $24.6 million press-time market capitalization.
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