Allegiant Gold Ltd. [AUAU-TSXV] shares rallied sharply Wednesday May 26 after the company said drilling had hit bonanza gold and silver grades at its 100%-owned Eastside Project in Nevada.
The latest drilling results are the best reported do date from the Original Pit Zone at the Eastside, which hosts a NI-43-101 compliant pit-constrained resource of 996,000 ounces of gold and 7.8 million ounces of silver, according to a January, 2020 resource estimate. The zone is open in all directions.
Drilling highlights from a nine-hole (3,673 metres) reverse circulation drill program include Hole 243, which included 2.55 g/t gold over 147.8 metres (3.17 g/t gold over 117.3 metres). Hole 243 was a 100-metre step-out from the closest hole in the Original Pit and is open west, east and south. The company said seven of the nine holes encountered mineralization.
“The results from the recent drill program at Eastside are simply the best received since Allegiant made the initial discovery,” said Allegiant Gold CEO Peter Gianulis. “The project has exceeded our expectations and continues to improve and positively surprise us with its potential,” he said. “We remain focused on executing our business plan and are well on our way to outlining a multi-million-ounce deposit as Eastside.”
Allegiant’s stock price rallied on the news, jumping 45.2% or 12 cents to 38.5 cents on active volume of 2.23 million. The shares are currently trading in a 52-week range of 71 cents and 23 cents.
Allegiant was spun out in 2019 to contain what were previously the Western U.S. exploration assets of Columbus Gold Corp. [CGT-TSX, CBGDF-OTCQX].
The junior owns 10 projects in the Western U.S., including seven in Nevada. All were handpicked by Andy Wallace, a successful and highly experienced geologist.
His track record of success includes multi-million-ounce gold discoveries including the Marigold, Pinson and Dee mines in Nevada. Wallace is currently working as the company’s technical adviser.
Allegiant’s flagship, district-scale Eastside project hosts a large and expanding gold resource and is located in an area of excellent infrastructure.
Preliminary metallurgical testing indicates that both oxide and sulphide mineralization at the Original Zone is amenable to heap leaching.
Allegiant said it has drilled over 210 holes over the past eight years in building a significant 1.0 million-ounce-resource. It noted that Hole 243 ended in gold mineralization, with the bottom running 12.2 metres of 2.24 g/t gold (within a 55-metre interval of 0.92 g/t gold)
The company continues to believe that there remains significant upside potential to discover additional silver, though gold continues to be the primary mineralization.
The company said future work programs in the Original Pit Zone will focus on defining the extent of this high-grade zone to better understand the implications on resource growth and mine planning and economics.