MAG Silver Corp.'s (MAG:TSX; MAG:NYSE American) final phase two drill results from its Deer Trail project in Utah added three zones to the previous Carissa zone discovery, reported PI Financial analyst Chris Thompson in an Aug. 3 research note.
"We view today's results as positive," Thompson wrote. "Drilling continues to identify long widths of polymetallic silver-gold-copper-lead-zinc mineralization."
PI maintained its Buy rating and CA$19.15 per share target price on MAG, noted Thompson. The return to target from where the company is trading now, at about CA$14.81 per share, is attractive, at 29%.
Trio of distinct zones
Thompson summarized the results of phase two drilling's last three holes: DT22-11, DT22-12 and DT22-13.
"We see distinctly different mineralization styles of separate zones as hallmark indicators of a significant, long-lived, multiphase carbonate replacement deposit mineralized system," the analyst wrote.
Hole DT22-11: This hole hit the thickest, manto-style mineralization drilled at Deer Trail to date, reported Thompson, which MAG is calling the Carissita Manto discovery. The hole was placed 400–800 meters away from the Carissa zone.
Grades encountered in this hole were up to 3.1 grams per ton (3.1 g/t) over 1 meter (1m) for gold, 0.79% over 5m for copper, 10.3% for lead and 12% for zinc, the last two over 0.95m. High silver grades, up to 156 g/t, were shown in a 3m zone of skarn at depth.
Hole DT22-12: Drilled about 800m north of the Carissa zone, this hole primarily encountered gold mineralization. It intercepted 33m of "weak manto alteration" averaging 0.6 g/t gold.
"Importantly high-grade, gold-bearing structures are beginning to be outlined, of which grade increased to 6.1 g/t gold over 1.5m," Thompson wrote.
Hole DT22-13: This hole showed multiple copper-gold zones. One highlight result was 29 g/t silver, 2.2 g/t gold and 2.1% copper over a 4.25m width, beginning at 1,060m downhole.
"We view hole DT22-13 as particularly notable with elevated copper grades pointing toward a copper-rich intrusive porphyry center, which awaits testing," Thompson wrote.
More drilling planned
In fact, reported Thompson, MAG plans to target this "inferred intrusive porphyry center" with up to three holes of drilling in its upcoming phase three program. Funding for this and other exploration efforts will continue to come from the company's stake in its joint venture, producing project Juanicipio in Mexico.
"We are impressed by MAG's approach to exploration and continue to see significant future exploration upside potential unlocked by MAG's systematic exploration approach," Thompson commented.
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