BTU down 35% on Red Lake update

BTU Metals Corp. [BTU-TSXV] shares were active again Tuesday October 15 after the company released an update on its exploration activities at its Dixie Lake Halo Project, near Red Lake, Ontario.

BTU has attracted investor attention because Dixie Halo adjoins the northern and eastern boundaries of Great Bear Resources Corp.‘s [GBR-TSXV; GTBDF-OTC] Dixie Lake Project, where Great Bear recently reported a high-grade gold discovery in drill core assaying 16.35 metres of 26.91 g/t gold and 7.0 metres of 44.47 g/t gold in two holes on the Hinge Zone.

Great Bear has secured the backing of Bay Street financier Rob McEwen and McEwen Mining Inc. [MUX-TSX]. They collectively own 18.8% of Great Bear on a partially diluted basis following their joint participation in a $10 million private placement financing.

BTU recently said exploration so far indicates that the Dixie Halo Project is host to an environment very similar to that associated with the important gold discoveries of neighbour Great Bear Resources at their Hinge Zone and Bear-Rimini Zone.

In order to test that theory, the company launched a maiden drill program in July 2019.

In its July press release, the company said the first target to be tested is located approximately 2.5 km southeast of the Hinge Zone. It said available records had not shown any historic drilling or sampling work within at least 1 km of the proposed location of the target.

On Tuesday, the company said a very significant result of the current drilling, notably holes 8, 9, and 10, is the confirmation that the sequence of rocks associated with Great Bear’s newly recognized LP Fault structure does come through the 12,963 hectare Dixie Halo property

BTU had previously said it was planning a fence of short holes to test strong, broad IP chargeability anomalies on what appears to be the strike extension of the LP Fault structure, which hosts high-grade gold at several locations along several kilometres.

The LP structure is reported to be 18 km in length and has now been identified underlying a 1.6-km section of BTU’s property near its north boundary.

BTU said drill holes in this area, designed to test the southern strike extent of the LP Fault, encountered thick sections of sulphide mineralized and altered sedimentary rock. The intensity of quartz veining and silicification with conspicuous fine grained, arsenopyrite increasing toward the contact with mafic volcanic rocks.

However, the share price reacted by falling 34.8% or $0.04 to $0.075 on volume of 2.15 million shares traded. The shares had previously traded in a 52-week range of $0.055 and 23.5 cents.

BTU said further defining of upcoming drill targets in the LP Fault will be guided by an SGH (Soil Gas Hydrocarbon) soil sampling program. This survey has been successfully utilized by Great Bear as a method to locate drill targets on their adjoining ground along the fault.

Meanwhile, as drilling continues at Dixie Halo (currently preparing for hole 14), assays for the first set-ups have been received. The company said it is very encouraged with the intersecting of anomalous gold, up to 1.8 g/t over 0.5 metres, in numerous holes at this early stage of exploration.

“BTU is funded to drill well into 2020 with immediate focus on the interpreted LP fault extension which harbours the same rock sequences which Great Bear has had tremendous success exploiting,” said BTU CEO Paul Wood.