As gold continues its upsurge in the markets, junior explorer Western Exploration Inc. (WEX:TSX.V;WEXPF:OTC) has released assay results from the final four holes at the Doby George deposit at its Aura gold project in Nevada.
One of those holes, DGC794, intersected 26.06 meters of 6.93 grams per tonne gold (g/t Au), including 12.34 meters of 4.57 g/t Au.
The company’s stock rose from CA$1.35 last Dec. 29 to CA$2.15 on Jan. 9. It was CA$1.92 on Wednesday.
“The recent sharp rise has brought it up into a zone of resistance at peaks over the past couple of years, so it is likely to pause to consolidate in this area,” technical analyst Clive Maund, who predicted the rise in December, told Streetwise Reports. “If it can get above about CA$2.50 it could really take off.”
Western Exploration Chief Executive Darcy Marud said the assay results demonstrated continuity of “high-grade, near-surface, oxide gold mineralization” at the deposit.
“Western Exploration has long believed in the higher-grade potential at Doby George, and the Phase 1 drill program completed in 2022 has confirmed this belief,” Marud said.
Gold climbed above US$1,900 an ounce for the first time in seven months last week ahead of the holiday weekend after the U.S. Labor Department said its Consumer Price Index fell 0.1% last month after a 0.1% rise in November. It was still about US$1,900 on Wednesday.
The Catalyst: Gold on the Rise
Traditionally a shelter for inclement weather in the markets, gold’s price held even after it was announced that the University of Michigan’s Consumer Confidence Index rose from 59.7 in December to 64.6 in early January.
Western Exploration said it had drilled a total of nine holes over 1,138 meters at Doby George between July and September 2022 to help it validate its current resource and assess its expansion potential. Hole DGC795 also intersected 30.94 meters of 2.07 g/t Au and hole DGC796 intersected 16.76 meters of 2.12 g/t Au.
Technical analyst Clive Maund, who predicted the rise in December, told Streetwise Reports. “If it can get above about CA$2.50 it could really take off.”
Western Exploration said it now plans to complete metallurgical test work at Doby George in the first half of this year before moving toward a preliminary feasibility study (PFS) and more drilling in Q3 and Q4.
The company, which has the backing of big names like Agnico Eagle Mines Ltd. (AEM:TSX; AEM:NYSE) (which owns 18% of the company), wants to grow the more than 1-million-ounce (Moz) Au and 10-Moz silver (Ag) resource at Aura, which is made up of the Doby George, Wood Gulch, and Gravel Creek deposits.
More than 1,200 drill holes have been completed on the Aura project totaling more than 200,000 meters.
The company also plans to drill in 2023 at Gravel Creek, with a preliminary economic assessment (PEA) to follow for it in 2024.
Western hopes to connect the Gravel Creek and Wood Gulch deposits, creating a “much larger footprint” with the potential for 2 to 5 Moz Au. The company also said a 3D geological model of Gravel Creek and Wood Gulch updated in 2022 significantly expanded the areas of prospective mineralization.
Precious metals mineralization at Aura was initially discovered at Doby George in the 1960s, but it wasn’t until the 1980s that Homestake Mining Co. discovered the Wood Gulch deposit. The project is 100% owned by Western and is about 32 kilometers north of the Jerritt Canyon Mine, which has been in operation since 1981.
It is in an under-explored area of Nevada, which with 5.58 Moz Au, hosted 84% of U.S. gold production in 2019. The state has historical production of more than 185 Moz Au.
Ownership and Share Structure
Streetwise Ownership Overview*
Golkonda LLC, a syndicate of dozens of high-net-worth investors, owns about 66% of the company, and Agnico owns 18%. Management and directors own about 2.8%, and other institutions own about 5.6%, the company said.
Western Exploration has a market cap of CA$60.44 million and has about 31.5 million shares outstanding, 11.2 million of them free floating. It trades in a 52-week range of CA$2.55 and CA$0.96.
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1) Steve Sobek wrote this article for Streetwise Reports LLC. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
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