VANCOUVER – Drills continue to hit near-surface gold mineralization at Unigold's (UGD-V) Neita project in the Dominican Republic.
The latest results from Neita came from the Connector zone, which lies between the primary Candelones Main and Candelones Extension targets at Neita. Both are massive sulphide occurrences that display stacked zones of mineralization.
If Unigold can trace mineralization from Candelones Main along the Connector zone to Candelones Extension, the resulting deposit would boast a strike length of more than 3 km.
Drilling results from the first program at Connector are promising, with seven of the first ten holes hitting significant gold mineralization. The best result came from hole 10, which cut 50 metres grading 1.51 grams gold per tonne, 8.8 grams silver per tonne, 0.1% copper, and 0.2% zinc. The intercept in hole 10 started just 2 metres downhole and included an 18.2-metre segment averaging 2.99 grams gold and 21.9 grams silver.
Several of the Connector intercepts started right at surface. For example, hole 9 returned 33 metres grading 1.79 grams gold and 8.9 grams silver, hole 6 cut 42 metres carrying 1.16 grams gold and 4.1 grams silver, and hole 7 drilled 26 metres of 0.94 gram gold and 9.6 grams silver, and all three holes started in mineralization.
Connector has been traced on surface for more than 700 metres strike, with mapping efforts having identified significant silicification and alteration in surface outcrop. Rock chip sampling returned such results as 27 metres of 1.36 grams gold, 57 metres of 0.83 gram gold, and 38 metres of 1.36 grams gold.
In mid-February Unigold announced the results from earlier five holes that tested the edges of the Candelones Extension zone. Hole 62 produced the best result, returning 103 metres grading 1.45 grams gold, 1.98 grams silver, 0.43% copper, and 0.28% zinc from 59 metres downhole. The intercept included two higher-grade segments: the first 39 metres averaged 2.43 grams gold, 3.39 grams silver, and 0.78% copper, while a deeper 8-metre segment carried 5.1 grams gold, 3.31 grams silver, 1.05% copper, and 1.68% zinc.
Hole 62 was a 100-metre step out from hole 52, which in November returned one of the best results from the project to date: 69.4 metres grading 3.75 grams gold and 10.3 grams silver. The five holes announced in February extended Candelones Extension mineralization 100 metres to the southwest.
Neita is in western Dominican Republic, its western edge defined by the border with Haiti. It is also on the western end of the Tireo formation, a 150-km long Upper Cretaceous sequence of volcanic and sedimentary rocks deposited as a result of the collision between the migrating Caribbean and North American plates. Tireo is a highly prospective mineral belt that is already home to several major mineral occurrences, including the 25-million ounce Pueblo Viejo gold deposit.
Until recently, Unigold had held several other Dominican Republic projects in its portfolio, but with Neita churning out promising results the company has been monetizing some of those other holdings. In January the company agreed to let Malbex Resources (MBG-V) buy Americana de Explotaciones, which owns a 13,400-hectare property adjacent to Neita to the south. Unigold held an option to acquire the property or Americana in its entirety, but the company decided to allow Malbex to make the acquisition instead.
In return, Unigold got 13 million Malbex shares and a 2% net smelter royalty (NSR), half of which can be repurchased for $1 million. If Malbex delineates 2 million measured and indicated ounces of gold on the property over the next five years, Unigold will get another 5 million Malbex shares. Unigold's president and CEO, Andrew Cheatle, says participating in the project through a shareholding in Malbex was the best way to take advantage of Unigold's Americana deal.
Similarly, just a few days before announcing the Malbex deal Unigold inked an agreement to sell its El Carrizal project to Terreno Resources (TNO-V). El Carrizal is adjacent to Neita to the east. In the deal, Unigold got 11.5 million Terreno shares and a 2.5% NSR on El Carrizal, half of which Terreno can repurchase for US$1 million. Unigold will receive $1 million in cash over the next two years and will bank another 5 million Terreno shares if the junior delineates 2 million ounces of gold in any resource category.
The deals added some coin to Unigold already well-stocked bank account, which currently holds $6.7 million. As such the company remains well financed to continue exploring at Neita.
News of the Connector zone drill results had little impact on Unigold's share price, which lost half a penny to close at 26.5¢. The company has a 52-week share price range of 21.5¢ to 52¢ and has 222.9 million shares outstanding.
In January the company adopted a shareholders rights' plan, or poison pill, designed to give the company's board of directors and shareholders enough time to properly evaluate any unsolicited takeover bids.
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