New high-grade zone uncovered at South Pipeline

The South Pipeline gold project is being enhanced by continued exploration drilling and the recent discovery of a deeper high-grade gold zone.

The new discovery was announced by Royal Gold (NASDAQ), a Denver-based company which holds a 20% net profits interest in the 4,000-acre project in Nevada’s Crescent Valley. The land package is a half mile south of the Pipeline gold discovery announced earlier this year by Placer Dome (TSE). Placer, 60% owner of the Cortez joint venture exploring Pipeline, is also operator of the South Pipeline project. In November, Royal announced that the project hosted preliminary reserves of nine million tons grading 0.082 oz. gold per ton.

This resource is expected to be increased by further drilling, as Royal announced in November that Placer Dome had encountered mineralization about 1,000 ft. west of the recognized Pipeline deposit.

Since that announcement, however, several reverse circulation drill holes confirmed the presence of near-surface oxidized gold mineralization, and indicated a new, higher-grade gold zone at depth which is still open in several directions and with depth.

Royal Gold Chairman Stanley Dempsey said the latest drilling confirms that a very significant system of gold mineralization has been discovered south of the Pipeline deposit.

“We are particularly enthusiastic about the discovery of high-grade gold mineralization at depth,” Dempsey said. “Additional information, including core confirmation drilling, will be required before ore reserve estimates can be undertaken.