Evrim Resources Corp. [EVM-TSXV] shares fell sharply in active trading Thursday December 6 after the company released initial drill results from its 100%-owned Cuale high sulphidation epithermal gold project in Jalisco, Mexico.
The company said it has received assay results from four of the first five drill holes targeting the La Gloria prospect. A total of 1,167 metres has been completed of a planned 3,000-metre program.
â€œUnfortunately the gold grades in the first few drill holes were significantly less than that encountered in the trenches at La Gloria,â€ said Paddy Nicol, Evrimâ€™s President and CEO.Â â€œThe drill rig is currently turning near the North Dome, where we have additional targets, and we are continuously evaluating our exploration program as the results are received,â€ he said.
Evrim shares reacted to the news by tumbling 72.36% or 89 cents to 34 cents on volume of 2.9 million. The 52-week range is 20 cents and $1.70.
On April 16, 2018, Evrim shares jumped to what was then a 52-week high of $1.55 after the company announced trenching results that returned 13.61 g/t gold over 106.2 metres in an area known as the La Gloria prospect.
Cuale is an early-stage exploration property that is prospective for high sulphidation epithermal gold-silver. It was initially staked under the Callinan Royalties Generative Alliance (now owned by Altius Minerals Corp. [ALS-TSX]), with formal title granted to Evrim for 100% ownership in November, 2017.
Cuale covers 97 km2 and is located 185 km west of Guadalajara in the Cordillera Madre del Sur.
The project is located in the same region as Agnico-Eagle Mines Ltd.â€™s [AEM-TSX, NYSE]Â Barqueno Project (663,000 oz gold and 2.2 million oz silver) and Endeavour Silver Corp.â€™s [EDR-TSX, EXK-NYSE] Terronera Project (37 million oz silver and 311,000 oz gold). It also benefits from what Evrim has described as excellent infrastructure, with roads and power lines crossing the property.
Evrimâ€™s ownership is subject to a 1.5% net smelter royalty for precious metals and a 1% net smelter royalty for base metals, payable to Altius Minerals.
In a November 23, 2017 news release, the company said gold mineralization from sampling at the La Gloria prospect indicates significant potential for an oxidized high sulphidation gold system at the Cuale Project.
It said rock chip sampling has defined a 500-metre by 250 metre zone of gold mineralization with all seven samples ranging from 0.19 to 4.56 g/t gold.
However, on Thursday the company said drilling highlights included Hole GLR18-01, which returned 14 metres grading 1.92 g/t gold from surface and 10.2 metres of 1.58% copper from 238.8 metres downhole.
Drill hole GLR18-02 returned 17 metres grading 0.52 g/t gold from surface.
The company said drill holes completed to date have intersected volcanic fragmental rocks, all of which have been variably altered and represent part of a significant hydrothermal system.
Additional targets include the North Dome area where post mineral breccia contains 30% to 90% quartz altered clasts, up to 1.5 metres in size, that contain gold grades from below detection to 11.90 g/t gold (19 to 63 rock chip samples are greater than 0.25 g/t gold).