Patagonia Gold (LON:PGD) has made some encouraging progress in its bid to expand the resource base of its flagship Cap Oeste gold-silver project in Argentina.
The company revealed this morning that the main shoot now extends down over 400 metres. Initial results from a 19,000 metre drilling campaign reveal that bonanza grades of gold and silver are present.
One 14.5 metre section of hole CO-168 contained 10.13 grams of gold per tonne and 143 grams of silver, while a 5.87 metre section of CO-170 contained 12.72 grams of gold 265 grams of silver.
The drilling programme, which is also designed test and infill four other peripheral shoots, revealed that shoot E now extends down to 260 metres and both this and the main shoot remain open at their current depths.
Eleven kilometres to the south-east, an 1,800 metre trenching programme is being carried out on the Monte Leone prospect, which has identified what the Patagonia describes as a “wide zones of highly anomalous mineralisation”.
This includes 48 metres from trench TR-016-MLN containing 1.01 grams of gold per tonne. A 3,500 metre diamond drill programme is now underway.
The Cap-Oeste project contains the Cap-Oeste deposit and the adjacent COSE deposit on which combined NI43-101 compliant resources of 762,325 ounces of gold equivalent, of which 85 per cent is in the indicated category.
Both Cap Oeste and Monte Leone are part of the El Tranquilo property block, covering over 80 square kilometres.
El Tranquilo is located 120 kilometres to the south east of the Lomada de Leiva gold project where development of a heap leach operation is currently in progress.
Irrigation for conditioning of the ore pad is due to begin on April 10, with handover of the commissioned process facility by the construction company, INFA, scheduled for April 25. A resource and scoping study upgrade is in progress with completion anticipated in the second quarter of this year.
The project currently contains a NI43-101 compliant resource of 161,346 ounces of gold in the measured and indicated categories with a further inferred 73,725 ounces of gold.
Earlier this week Patagonia revealed what it described as ‘highly encouraging’ drilling results from Lomada de Leiva. It included an 18 metre section containing 10.95 grams of gold per tonne.
The first stage of the Lomada project consists of a 50,000 tonne trial heap leach pad and processing facility, which based on 70 percent recovery, is estimated to yield approximately 2,500 ounces of gold for the first six metre loading.