Vancouver – PC Gold (PKL-T) has cut some very rich gold intercepts in a newly-discovered vein at its Pickle Crow property in northwestern Ontario and the news sent its stock skyward.
The company has been exploring several vein structures at the historic mine with three drill rigs on site, but it is the recently discovered No. 19 vein that is causing the most excitement.
Kevin Keough, president of PC Gold, said over the phone that the new vein was a “total surprise.” The company stumbled upon the vein, which was hit at about 530 metres depth, as it was trying to drill below the much deeper historic workings of the Pickle Crow mine.
“We’ve always said we want to drill this thing to as deep as 2,500 metres vertical from surface,” said Keough. “The surprise in yesterday’s news, and it’s a big surprise, is that …it was in the top third of the deep hole that we had these surprising intercepts of what became the No. 19 ‘Golden Beast’.”
The company has released two drill results from the No. 19 vein. Hole W02 hit 13.1 metres grading 43.28 grams gold per tonne starting at 530.4 metres and included 4 metres averaging 138.89 grams gold and within that 2 metres grading 201.96 grams gold. Hole W01 cut 7.6 metres grading 8.23 grams gold, including 1.8 metres grading 19.37 grams gold, starting at 492.5 metres.
“They’re exceptional when you multiply the grams by the metres,” said Keough. “That’s really what you’re looking for, and that’s a big number.”
The new vein is hosted in a porphyry body that was little explored outside the vertical workings of the mine in earlier operations.
“That discovery really opened our eyes wide to the possibility of more veins just like it next to the workings,” said Keough.
Southeast of vein 19, the company continues to use a deep-capable rig to drill a mother hole and a wedge below historic mine shaft No.1, one of three historic shafts still accessible. In February the company announced it had hit 3.2 metres returning 134.26 grams gold starting at a depth of 1,139.8 metres, including 1.5 metres grading 284.13 grams gold and within that 0.5 metre grading 838.14 grams gold. The intercept was cut roughly 210 metres below the lowest level historically mined on this vein.
The company has been using a third rig to explore the No. 20 vein, which it discovered in January. Located southwest of shaft No.1, the only result so far is 0.5 metre grading 20.96 grams gold from 126.5 metres downhole, but more results are pending.
PC Gold has been finding solid gold hits throughout the property. In a 2009 drill program the company hit 1.2 metres grading 112.15 grams gold in the No. 5 vein, located between shaft No. 1 and vein No. 20, and cut 0.3 metres grading 38.77 grams gold in the No. 11 vein, which runs parallel to the No. 5 vein.
“The basic objective is to prove that there is a lot of gold at Pickle Crow both in it, around it and below that old mine,” said Keough of the overall drill program.
PC Gold was incorporated in late 2007 and went through an initial public offering in 2008 just before “all the wheels fell off,” as Keough put it. The sole focus of the company has been to develop the past-producing Pickle Crow property, roughly 400 km north of Thunder Bay. Property ownership in the area used to be fragmented but PC Gold consolidated it and now has 100% ownership of 4,117 hectares around the old mine. PC Gold acquired the property for $3.5 million, 9.5 million shares and 2.4 million share purchase warrants.
Keough said he is a year behind where he wanted to be because the company basically had to shut down when the financial crisis hit and the company’s stock went from a dollar to a dime.
“When the markets collapsed we did too. We basically shut everything down at that point and we sat for eight, ten months,” said Keough.
Since then it’s been tough to get attention as a penny stock on the TSX, explained Keough.
“The point of the current exercise has been to get us established, to generate results that finally wake the market up, to make people realize that Pickle Crow remains what it always was, which is a great property,” said Keough.
The mine was previously in production between 1935 and 1966, during which time it produced roughly 1.44 million oz. gold and 168,757 oz. silver from 2.8 million tonnes of ore. Eventually the mine got too deep to be financially viable at US$35 per oz. gold.
Mineralization at the property is associated with narrow, high-grade, quartz-bearing carbonate veins hosted in metamorphosed mafic lavas and porphyry. Gold is also hosted in iron formations adjacent to vein structures.
There is paved road access to within 6.5 km of the site, followed by a gravel road. The property has a 225-tonne-per-day mill from an earlier exploration program as well as electrical generators, office and dry trailers, fuel storage tanks, a tailings impoundment area and roughly 40 km of underground development.
In December the company raised $6.95 million in its public offering of 5.1 million units and 4.2 million flow-through shares.
For the year ahead, Keough sees lots of drilling.
“We’re going to be drilling aggressively…The idea is to really pour the drilling into the property. What we want to do is to prove there’s a really large resource there,” said Keough. “I think that based on the results of the last day or so you can envisage taking this property up into the multi-million-ounce threshold with time and drilling effort.”
PC Gold’s share price was up 77¢ or 113% on a volume of 17 million in the two days following the latest drill results to close at $1.45. The company’s 52-week share price range is between 42¢ and $1.45; the company has 43.7 million shares outstanding.