Argonaut Gold (TSX: AR) has reported high-grade intercepts from its phase two drill program at the company’s wholly-owned Magino gold project in Ontario, 14 km southeast of Dubreuilville.
The phase two drill program targeted high-grade mineralization identified during the phase one program at the property’s Elbow zone, situated below the proposed pit at Magino.
Highlights include drill hole MA20-040, which intercepted 20 metres grading 4.58 grams gold per tonne, including 6 metres of 8.31 grams gold per tonne, starting from 444 metres downhole.
“The significance of the latest drill results from the Elbow zone is that we are starting to see promising continuity of high-grade mineralization in phase two of the drill program,” Pete Dougherty, the company’s president and CEO, said in an email. “Phase one tested mineralized structures down to a depth of approximately 1,000 metres below the surface, where we had several high-grade intercepts.”
The results from phase one, he added, while successful in targeting the proper structures, the drill spacing was 200 metres to 400 metres in distance. Therefore, the company decided to reduce the spacing to test the continuity, and in phase two focused on the upper and lower areas of the Elbow Zone, with both showing very promising continuity from drill spacings now at an average of 40 metres, Dougherty noted.
“This continuity allows us to put together a diagram of what might happen and provides us the opportunity to visualize rough mineralized zones for projected mining,” Dougherty said. “We also have two other zones, Central and South, that we are awaiting further assays and we are encouraged by early work on these zones.”
The company has now completed 54 diamond drill holes, including six wedge holes, covering 34,852 metres in the two drilling campaigns.
The drill results to date, Dougherty believes, indicate the continuity of mineralization in the upper and deep portions of the Elbow zone.
In the upper Elbow zone, the company drilled four additional holes to test continuity around hole MA19-016, which returned 14 metres grading 9.63 grams gold from 360 metres downhole.
Argonaut has completed a total of 10 holes in phase one and two around hole MA19-016, all of which, Dougherty noted, have intercepted significant gold mineralization.
“These results tell us that we have the potential to add high-grade mineralization under the proposed open mine pit,” he added. “If we are successful in our future programs and are able to prove an economic high-grade mineral reserve, it completely changes the game for the asset.”
The deepest hole to date, MA20-026A, intersected 7 metres grading 7.84 grams gold, including a high-grade intercept of 1 metre grading 47.8 grams gold from 984 metres downhole. The mineralization remains open at depth.
The company plans to conclude the phase two drill program with a series of offset holes that are currently being drilled around MA19-020, which intersected 6 metres grading 10.79 grams gold from 833 metres downhole, to establish a third continuity test zone.
This zone, Dougherty noted, is about 650 metres deep and lies approximately halfway between the continuity zones around holes MA19-016 and MA20-026A.
“With the success we are seeing in our Phase two program, we are very likely to commit to a phase three program once phase two is completed,” he added. “This will involve tightening the drill spacing even further with the goal of producing a maiden underground, high-grade resource.”
There are also several other exploration targets on the property, he noted, that they want to test for the potential for numerous high-grade structures. This exploration work, he added, will run in parallel with the development of the open pit project.
On July 23, the company closed a $126.5 million bought financing deal, which, Dougherty said, is specifically earmarked for the advancement of the Magino open pit project.
“We feel that Magino has the potential to be a company-maker due to its combination of jurisdiction in Canada, size of mineral endowment, excellent project infrastructure, and exploration upside,” he added.
At press time in Toronto, Argonaut was trading at $2.83 per share within a 52-week trading range of 76¢ and $2.99.
The company has around 288 million common shares outstanding for an $816.3-million market capitalization.