Drilling 100 metres to the west of the diorite that hosts Wesdome Gold Mines’ (TSX: WDO) Eagle River mine in Ontario has encountered a new discovery zone called Falcon, the company reports.
Surface exploration drilling returned 73.5 grams gold over 1.3 metres starting from 209 metres downhole, and 18.5 grams gold over 5.8 metres from 170 metres downhole.
The discovery follows the announcement in March that the company found two parallel structures west of the mine diorite that it says could be the along-strike and up-plunge extension of the 300 and 7 zones that are being mined 200 metres further east. Both parallel zones are open up and down plunge and along strike, and will be a focus of Wesdome’s underground drill program this year.
The new Falcon zone includes Falcon 300, which has been traced over 100 metres strike length and 150 metres down dip, and Falcon 7, which has been traced over 130 metres in strike and 180 metres down dip.
Falcon 300 appears to diminish along strike to the west, but remains open to the east and at depth, the company says, while Falcon 7 is open to the west and at depth.
“From the plan view in the press release, it appears that the intercepts extend approximately 100 metres outside the diorite unit, which was the previously understood limit of mineralization extension and remains open to the east,” Andrew Mikitchook, an analyst at BMO Capital Markets, writes in a research note. “It is a positive indication of the potential gold mineralization outside of the mine diorite and the potential to find higher grade over wider true widths.”
“The new discovery is still early,” he continues, “but has the potential to complement the previously announced discovery of the New Parallel zones, which, in our opinion, is still the most noteworthy catalyst to be watching for at Eagle because of the near-term implications on throughput.”
The Eagle River underground mine in Wawa is part of a larger complex that includes the Mishi open pit mine and a central mill.
Wesdome shares are trading at $4.11 in a 52-week range of $1.84 to $5.46. The company has a $558 million market capitalization.
BMO’s Mikitchook has a price target on the stock of $6.00.