Contact Gold (C.V) has released the assay results of the first two holes it has drilled on the Green Springs gold project in Nevada, where it’s earning full ownership from Ely Gold Royalties (ELY.V). Contact invested in doing its homework in the last quarter of last year and started a drill program in the fourth quarter on the Alpha, Beta, Charlie and Echo zones.
The assay results from the first two holes that were drilled at Alpha (as part of a six-hole campaign on that zone) are encouraging and perhaps the 0.52 g/t gold over 58 meters doesn’t look that appealing on a grade-basis although 0.52 g/t in oxides should definitely be viable in Nevada. Additionally, a continuous interval of 58 meters should have a very positive impact on the eventual strip ratio and on top of that, there also was a 9.14 meter interval containing almost 0.67 g/t gold almost starting at surface and ending just 10 meters above the start of the 58 meter interval. The real eye—catcher however was the 1.34 g/t gold over almost 29 meters as that hole combined a very reasonable thickness with a good gold grade for oxide mineralization.
The implications of both holes should not be underestimated: hole 1 (the 58 meters at 0.52 g/t) extended the gold mineralization further to the South of historic drilling while the second hold with the higher grade gold extended gold mineralization beneath a historic hole that didn’t reach its targeted depth. So both holes are actually good news.
The market appeared to have shrugged off these assay results and although the total volume exceeded a million shares on the day the news hit the wire, the stock only moved up by just a cent, only to lose that cent again the day later. The apathy of the market is remarkable given the thick and economic grade intercepts, but perhaps the expectations were too high as the most recent press release on Green Springs disclosed how Contact re-assayed older samples to end up with almost 40 meters containing 5 g/t gold. However, keep in mind those holes were from a different part of the project and the Alpha Zone wasn’t expected to have similar grades.
The assay results of the first two holes are just the start and eight more holes (including four additional holes from Alpha) will be released soon.
Disclosure: The author has a long position in Contact Gold. Contact is a sponsor of the website.