Three drill holes in the Naranjos vein of the company announced Wednesday.100%-owned Santa Ana silver-gold project in Colombia have returned the thickest and highest-grade intercepts for the project yet,
Hole DH270 returned 6.93 meters of 2,184 grams per tonne silver equivalent (g/t Ag eq), including 1.06 meters of 8,787 g/t Ag eq. Los Naranjos shows a weighted average grade of 1,651 g/t Ag eq over an average intercept width of 1.72 meters.
Analyst Stuart McDougall of Research Capital Corp. on Wednesday issued a note and kept his “speculative buy” rating on the stock with a CA$0.75 target price.
The result is “the thickest intercept from the project so far and the best, when measured in terms of gram-meters,” McDougall wrote.
Santa Ana covers 36,000 hectares of the Mariquita District of Colombia, mined back to at least 1585. Spanish Royal Archives reports said the area had 14 mines producing an average of 4000 g/t Ag over an average of 1.4 meters, with some mines finding as much as 17,000 g/t Ag.
Exploring a core area of colonial-era mines has resulted “in the discovery of what is now 13 high-grade shoots measuring 2.8 kilometers in cumulative strike length and up to 480 meters down plunge,” McDougall wrote. “All remain open for expansion with further drilling.”
Outcrop is expanding into untouched areas, leading to improved intercepts, Chief Executive Officer Joseph Hebert said this week.
“Part of that is getting into areas that are devoid of any history of Spanish mining, but the other part is that we’re digging deeper,” Hebert said.
Los Naranjos is 200 meters wide, extends 250 meters down, and is open in all directions, the company said. Eighteen holes have been drilled; eight have returned high-grade assays and the results from three holes are still pending.
“The more drilling we complete on Santa Ana, the more resource potential we identify,” Hebert said.
Maiden Resource Estimate Expected Soon
Research Capital’s rating is based on an estimated resource of 50 million ounces silver equivalent (50 Moz Ag eq). So far, Outcrop has mapped and sampled some 32,000 meters of drilling at Santa Ana and outlined about 12 kilometers of continuous silver veins.
It’s all part of an 18,000-meter drill campaign to establish a maiden resource estimate late this year or early next year.
Outcrop raised $6.9 million in a March public offering. Mining financier Eric Sprott bought 7.4 million units for just less than CA$2 million and controls almost 17% of the junior explorer.
Colombia last month elected its first leftist president, Gustavo Petro, who has promised to halt new gas and oil development and halt new permits for strip mining. But Hebert said Outcrop had little to worry about.
“We don’t expect his governing to be like his campaigning,” Hebert said. “He’s already put in some center-right advisers. … Underground-type projects that have a lot of local support and social engagement, I really don’t think those are going to be a target.”
Santa Ana is in the northern Tolima Department, about 190 kilometers from Bogota. It’s comprised of five or more regional scale parallel vein systems across a trend 12 kilometers wide and 30 kilometers long.
Outcrop has a market cap of CA$19.16 million with 132.15 shares outstanding. It trades in a 52-week range of CA$0.36 and CA$0.10.
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