Montezuma Mining Company (ASX:MZM) has confirmed the presence of high-grade gold up to 19.1 g/t gold in the first-ever reverse circulation drilling at its Yamarna project in Western Australia.
The first three reverse circulation holes at the project’s Jatz prospect have returned multiple ore-grade intercepts in zones of greenstones with strong silica, carbonate, pyrite and sericite alteration.
Intercepts from the drilling included the following:
– 10 metres at 0.9 g/t from 46 metres;
– 7 metres at 5.4 g/t gold from 64 metres, including 2 metres at 17.5 g/t gold; and
– 4 metres at 1.9 g/t gold from 119 metres, including 2 metres at 3.3 g/t gold.
The mineralisation has all the hallmarks of a mesothermal shear-hosted gold system with potential for significant scale.
Drilling in the area is ongoing with about 13 holes for 1,800 metres completed to date.
So far, this work has confirmed thicker widths of similar alteration 400 metres to the north of the initial results.
Assays for these holes are pending.
The latest deep drilling results at Yamarna support the encouraging hints revealed by Montezuma’s shallow first-pass campaign earlier this year, which indicated the presence of widespread anomalism in three regional-scale mineralised corridors.
Reconnaissance exploration results included 11 holes hosting gold values greater than 0.1g/t gold, with individual assays up to 2.7g/t gold.
This was interpreted as evidence of multiple large-scale gold systems, with the three highest-priority drill targets designated as Jatz, Captains and Cruskit.
Jatz was identified as the standout target, with strong basement mineralisation, including ore-grade intercepts along a strike of over 1.5 kilometres.
The overlying cover is variable in thickness, from about 12 metres in western areas to over 40 metres to the east.
The basement mineralisation intersected also showed a moderate to strong copper, bismuth, molybdenum and tellurium association, a common assemblage in meso-thermal gold deposits in the Yilgarn Province.
These drilling results exceed all expectations and represent an extremely encouraging start to the more in-depth exploration of Yamarna.
Intersecting grades of this magnitude in a first-ever reverse circulation program suggest that more drilling will continue to prove up the widespread mineralisation indicated in the reconnaissance exploration phase.
Importantly, all of the three established targets are open in all directions.
In addition to these high-grade intercepts, extensive and high-tenor regional anomalism has been defined in recent geochemical work – further reinforcing the upside of the project.
Work at the site is now planned to accelerate in 2016, setting up future price catalysts as drilling continues.
In particular, investors will be watching the development of the area north of the latest Jatz drilling results, where even thicker widths of similar mineralisation have been encountered, with assays pending.
The stock last closed at A$0.255, but should open higher on this news. The high cash and investments level provide for an undervaluation that looks set to propel the share price as the drill program unfolds.
Finding gold at grades of this magnitude in the first ever reverse circulation drillhole at the project is highly significant. It re-affirms our bullishness on the stock.
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