Vanstar Mining (VSR.V) finally received the final batch of assay results from partner IAMgold (IAG, IMG.TO) which is funding all of the exploration programs on the Nelligan project (25% owned by Vanstar, subject to a reduction to 20% if IAMgold completes a positive feasibility study on the project – which is still years away).
The headline result was hole 157 containing 39.1 meters (32 meters true width) of 2.14 g/t gold including 11.5 meters at 3.88 g/t indicating the residual 27.6 meters of the interval contain an average of 1.41 g/t gold which confirms the consistency of the mineralization rather than being caused by a nugget effect. That’s great but the caveat here is that the 32 meters on a true width basis only start approximately 304 meters down-hole, so around 200 meters vertically below surface. This confirms the presence of gold-bearing zones towards the bottom of the conceptual open pit and confirms the exploration theory. A pleasing result, especially as that same hole encountered additional gold zones above that interval with for instance almost 22 meters true with at 1.33 g/t and a more impressive 14.2 meters true width containing 2.65 g/t gold starting less than 31 meters down hole.
According to the company, one of the holes didn’t reach the target depth and although Vanstar didn’t disclose which one of the three holes that was, we’d bet our money on hole 156 as the end of the hole was reached at just 216 meters, not even close to the 621 meters in hole 157 and 441 meters in hole 158.
These assay results confirm why IAMgold is rightfully excited about Nelligan and why the company has already initiated the summer drill program. It looks like the current 3.2 million ounce inferred resource estimate will continue to grow, and with gold at $1900/oz the question is for how much longer IAMgold will tolerate a non-contributing minority partner on a multi-million ounce asset in Québec. Vanstar’s CEO resigned last week and perhaps IAMgold will take advantage of the leadership vacuum?
Disclosure: The author has no position in Vanstar Mining but could initiate a long position soon. Vanstar is not a direct sponsor of the website, but we were compensated by a third party.