Allegiant Gold Ltd. [AUAU-TSXV; AUXXF-OTCQX] shares rallied Monday January 27 after the company released an updated Inferred Resource estimate for its flagship Eastside gold project near Tonopah, Nevada.
Allegiant’s stock price rallied on the news, rising 14.3% or $0.025 to 20 cents. The shares are currently trading in a 52-week range of $0.07 and 29 cents.
According to the update, Eastside contains an Inferred Mineral Resource of 1.1 million ounces of gold equivalent (57.05 million tonnes) at a grade of 0.60 g/t gold, within a pit-constrained model using a cut-off grade of 0.15 g/t gold, a gold price of US$1,550/oz and a silver price of US$19.67/oz.
That marks an increase of 52% from an earlier estimate, or an addition of 373,000 ounces of gold within the pit at the Original Zone.
The company said the resource is open in all directions and planned work for 2020 will focus on expansion of the Original Zone to the south, north, west and east.
The updated resource at the Original Zone is separate and distinct from the Castle claim block at Eastside, which hosts a near-surface historical oxide gold resource of 273,173 ounces of gold.
Allegiant was spun out last year 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.
The 100%-owned Eastside Project was previously estimated to contain a pit-constrained Inferred Resource of 35.78 million tonnes grading 0.63 g/t gold equivalent for a total of 721,000 gold equivalent ounces in the Original Zone.
Preliminary metallurgical testing indicates that both oxide and sulphide mineralization at the Original Zone is amenable to heap leaching.
“We continue to be pleased with the progress being made at Eastside and are looking forward to expanding the operating permit,” Wallace said in a press release, Monday. “This will allow us to explore the additional targets we have outlined with the goal of increasing resources,” he said. “We will continue to explore the areas immediately adjacent to the Original Zone as the deposit is still clearly open to the south, west and at depth, and possibly to the east and north.”
The company has said its goal in updating the initial pit-constrained resource at the Original discovery zone at Eastside is to provide a clearer idea as to the amount of economic resources as well as potential for the expansion of the pit zone.
“We believe that the 67 km2 Eastside district has the potential to host numerous pit zones and we will be spending the next year identifying additional zones beyond the existing pit zone in the north and the Boss/Castle resource area in the south,” said Allegiant CEO Peter Gianulis
“We have only explored less than 5% of the total property and are very excited for the upcoming exploration program in 2020.”