Contact Gold Corp. [C-TSXV] has reported a new gold discovery on its Pony Creek property in Nevada. Pony Creek is strategically-located immediately south of Gold Standard Ventures Corp.’s [GSV-TSX, GSV-NYSE] Railroad-Pinion Project, which has been widely tipped to be among Nevada’s next gold mines.
The Pony Creek property covers 13,772 hectares and is underpinned by a Carlin-type system with historic gold resources based on estimates by Newmont Mining Corp. [NEM-NYSE] (1983) and Mill City Gold (2004).
The maximum depth of drilling within the historic area is 300 metres, with the majority of holes drilled to a depth of 150 metres, with gold mineralization starting at the surface.
In 2017, Contact Gold completed 42 drill holes (10,390 metres) in a program that targeted the Bowl Zone and North Zone. The company has said 40 of the 42 holes intersected gold mineralization at a cut-off gold grade of 0.14 g/t.
The new discovery was intersected by drill holes that were designed to test the 2-km gold-in-soil anomaly and CSAMT anomalies (West Target), which were generated through the 2017 exploration program to build upon areas of open gold mineralization at the Bowl Zone.
The company said highlights from 12 holes (2,500 m) drilled this year include 0.42 g/t gold over 33.5 metres oxide from 4.57 metres in discovery hole PC18-018 at the West Target, including 1.11 g/t gold over 4.5 metres.
Drilling by previous operators in the area of the West Target failed to reach its structural control for gold mineralization identified by Contact Gold, the company said.
“The West Target is one kilometre north of the property’s Bowl Zone and is interpreted to be located along the same major north-south structure associated with oxide gold mineralization at the Bowl Zone and potentially Gold Standard Ventures’ Jasperoid Wash zone,” it said in a press release.
“The team is very excited with this genuine new discovery of gold at Pony Creek,” said Vance Spalding, Vice-President, Exploration at Contact Gold. He said the West Target was generated through first-principles exploration methods, including geology, geochemistry and geophysics completed in 2017.
“Intersected oxidized, near-surface gold mineralization in the first hole into a fresh target is what every exploration geologist dreams of and it happens very rarely in a mature area like the Carlin,” said Spalding.
“The West Target is over two kilometres long and we intend to aggressively drill test both the west and east flanks of it in the coming months,” he said.
Drilling through 2018 is designed to expand mineralization at the Bowl Zone and to test new large-scale targets, including the North Zone, and the West Moleen, and Elliot Dome targets, generated by Contact Gold since the company acquired the property one year ago.
The company has completed 29 holes this year, totaling over 6,000 metres of 16,000 metres of planned drilling. This program forms part of a comprehensive property-wide exploration program consisting of 4,000 soil samples and geological mapping to support additional drill target generation.
Contact Gold shares advanced 2.27% or $0.01 to 45 cents on Wednesday. The stock is trading in a 52-week range of 79 cents and 27 cents.