Labs are still backed up due to high employee absenteeism caused by COVID, so most exploration companies have had to wait longer than expected to receive their assay results. NevGold Corp. (NAU:TSX; NAUFF:OTC; 5E50:FSE), for instance, started its Limousine Butte drill program in Q4 2021 but only recently reported the first batch of assay results.
All four holes encountered oxide gold mineralization, and although the headline result is almost 62 meters containing 2.19 g/t gold (including 11.6 meters containing 8.51 g/t gold indicating the remaining 50 meters still had an average grade of 0.72 g/t gold which definitely exceeds traditional cutoff grades in Nevada), it’s interesting to see all four holes yielded good to excellent results with gold grades that should easily exceed the traditional Nevada oxide deposit cutoff grades.
NevGold kicks off the Limousine Butte exploration season with a strong start as all four holes contain relatively thick intervals with good gold grades. And more importantly, it has now been able to focus on the areas where previous operators left some low-hanging fruit. Not only were the historical holes rather shallow (which means it should be easy enough to add some tonnes at depth), the pilot shale appears to be continuing underneath the dolomite and the previous operators never drill-tested the areas below the dolomites for gold mineralization.
This is an excellent start of the program, and as NevGold has added a second drill rig to the 10,000 meter drill program, we should now see a rather continuous news flow of additional assay results with the next batch of drill results being released within the next few weeks.
NevGold promised to release an updated resource estimate after the drill program has been completed, and we expect to see a substantial improvement from the historical resource of 241,000 ounces of gold in the measured and indicated resource category and the 51,000 ounces in the inferred category. Not only will the company be able to reduce the cutoff grade compared to the 0.41 g/t gold used in the historical resources, the core holes will increase the confidence in the geological structures while NevGold can easily expand towards the west and the east from the four reported holes as the pilot shale will be drill-tested for additional mineralization. It’s not exactly a secret NevGold wants to come out with 1 million ounces of gold right out of the gate when it publishes the resource update by this summer. It looks like both Cadillac Ridge and Resurrection Ridge have the potential to each host 400,000 to 500,000 ounces of gold in near-surface oxide mineralization.
The results from the first four holes confirm this is an excellent start of the exploration program at Limousine Butte, and we are already looking forward to the next batch of results. The initial program at Limousine Butte consists of 10,000 meters, but Nevgold likely wants to kick off a Phase II drill program right away while it has also put aside the budget for an additional 2,500 meter drill program at Cedar Wash.
Thibaut Lepouttre is the editor of the Caesars Report, a newsletter and mining portal based in Belgium that covers several junior mining companies with a special focus on precious metals and base metals. Lepouttre has a Bachelor of Law degree and two economics masters degrees that have forged his analytical approach to the mining sector. Considered a number cruncher, Lepouttre focuses on the valuations of companies and is consistently on the lookout for the next undervalued mining company.
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