Osprey Gold up 70% on Nova Scotia drilling news

Osprey Gold Development Inc. [OS-TSXV; OSSPF-OTCQB] shares jumped 70% in heavy trading Thursday January 30 after the company released assays results from initial drilling at its Goldenville property in Guysborough County, Nova Scotia.

The results released on Thursday are assays from the first three holes of a 13-hole, 2,003-metre program. All three holes returned elevated gold values, including hole G19-18, which returned 2.0 metres of 269.15 g/t gold.

Holes G19-16 and G19-17 both encountered multiple zones of gold mineralization, including G17-19, which encountered a zone of 8.0 metres of 0.80 g/t gold. This area is open to the east.

The results demonstrate that narrow high-grade gold mineralization and lower-grade disseminated gold mineralization are abundant at Goldenville, the company said in a press release.

Osprey shares advanced 70% or $0.035 on the news to 8.5 cents on volume of 9.4 million. That made Osprey the most actively traded stock on the TSX Venture Exchange on Thursday.

Osprey is a Canadian junior exploration company that is focused on past-producing gold mines in Nova Scotia that it hopes to develop using open pit extraction methods.

The company’s key asset is the Goldenville Project, which ranks as the largest gold producer in the province’s history. Osprey is also exploring four other projects, including Miller Lake, Gold Lake, Lower Seal Harbour and Caribou Gold.

Osprey has the option to earn 100% (subject to certain royalties) in all five properties. All of the properties have a history of high-grade gold production.

On March 16, 2017, Osprey announced the results of an updated gold resource estimate for Goldenville, which has a long history of underground production and is located in northeastern Nova Scotia, near the town of Sherbrooke.

According to the NI 43-101-compliant technical report, Goldenville contains an Inferred Resource of 2.8 million tonnes at 3.20 g/t tonne gold for 288,000 ounces of gold (2,800,000 tonnes at 4.96 g/t gold for 447,000 ounces of gold uncapped). That marks a 60% increase from an estimate released by a previous operator in 2005.  The uncapped resource includes drill core assays over 70 g/t gold.

The optioned properties are located in the same rock formation as Atlantic Gold Corp.’s Moose River Consolidated (MRC) Project, which produced 51,422 ounces of gold in the first half of fiscal 2020. Atlantic Gold was acquired by Australian Stock Exchange listed Santa Barbara Ltd. in July 2019.

Assuming Goldenville is proven to contain a viable gold resource Osprey plans to take the same approach as Atlantic Gold by employing open pit mining methods in a region where geologists didn’t think it was feasible to mine disseminated gold via open pit methods.

The company believes it can achieve this goal due to the recognition of disseminated-style mineralization in recent years, which has changed the understanding of the potential of the region.

“We’re very pleased with these initial results from the drill program at Goldenville,” said Osprey President Cooper Quinn. “We’re looking forward to additional results from holes working to expand our existing resource at Goldenville, and as well from five holes drilled at Mitchell Lake, where we drilled disseminated gold mineralization in 2017.”