By Peter Kennedy
Galway Metals Ltd. [GWM-TSXV; GAYMF-OTC] rallied sharply on Wednesday February 13 after the company reported the first assays from a new gold find at the company’s Clarence Stream project in southwest New Brunswick.
The discovery hole, BL18-12, returned 7.3 g/t gold over 36.7 metres, including 38.1 g/t gold over 6.5 metres in multiple quartz veins containing abundant visible gold, starting only 51 metres downhole and 36 metres vertical, Galway said in a press release.
Significantly, the new gold zone is in an area where there has been no previous drilling. This new zone is centred between the George Murphy and Jubilee Zones, approximately one km from each.
“These results exceed even our most optimistic expectations and we stand by our belief that Clarence Stream represents a new district scale opportunity,” said Galway Metals President and CEO Robert Hinchcliffe.
Investors responded by sending Galway shares up 38% or 10.5 cents to 38 cents on active volume of 1.5 million. The shares previously traded in a range of 30 cents and 13 cents.
Galway is a well-financed Canadian exploration company with 100% ownership in two high-grade properties in New Brunswick and Quebec.
Headed by highly experienced management, Galway recently raised $3.37 million from a non-brokered private placement of 2.8 million Quebec flow-through shares at 23 cents a share, 5.6 million federal flow-through shares at 20 cents per share and 9.4 million common shares at 17 cents a share.
Proceeds will be used to fund field work at the company’s Estrades and Clarence Stream properties, where company is applying a new exploration philosophy in a bid to unlock value for shareholders.
For example, an updated resources estimate at the Clarence Stream Project demonstrated that the project could be developed either as an open pit or underground mining operation or a combination of both. That marks a change in thinking from a previous operator who could only envisage an underground mining operation.
Covering 60,465 hectares, with 65 km of strike length, Clarence Stream is estimated to host a NI 43-101-compliant measured and indicated gold resource of 6.17 million tonnes, grading 1.96 g/t gold, or 390,000 ounces. On top of that is an additional inferred resource of 3.4 million tonnes, grading 2.53 g/t gold, or 277,000 ounces. Gold mineralization is contained in the North and South zones, each of which features unique host rocks and deposit geometry.
Those estimates include an underground resource of 38,000 ounces (indicated) and 124,000 ounces (inferred). The balance is classified as “pit constrained.”
Clarence Stream also comes with an inferred antimony resource of 2.7 million tonnes, grading 0.37% Sb or 22 million pounds. Antimony is a semi-metallic chemical element that is used in the production of lead acid batteries.
Having been advised to undertake a Preliminary Economic Assessment, the company has focused on discovering new satellite zones to demonstrate the district scale potential of Clarence Stream, and on expanding existing zones.
It is worth noting that a previous operator, Freewest Resources, defined a 432,000 ounce resource (Indicated 182,000 ounces at 6.9 g/t gold; inferred 250,000 ounces at 6.3 g/t gold) along just 2 km of the 65-km land that Galway now controls.
On Wednesday, the company said the new discovery highlights the importance of Clarence Stream as one of Canada’s most exciting new gold camps.
Galway said drilling in Hole BL19-15 also intersected visible gold twice, approximately 50 metres northwest and 97 metres below the visible gold seen in BL18-12. Assays for BL19-15 are pending.
“The new discovery in holes BL18-12 and BL19-15 represents the second deposit that Galway has found since it began drilling Clarence Stream in October 2016, (the George Murphy Zone being the other) and the fifth deposit identified in the Clarence Stream district to date.
Currently, only two of these five deposits, the North and South zones, are in the existing resource.
Aside from Clarence Stream, the Galway portfolio includes the Estrades property, located in the Casa Berardi area of western Quebec. Estrades includes the former high grade Estrades polymetallic mine, related Newiska concessions and adjacent Casa Berardi claims, which are largely contiguous and cover 14,854 hectares.
Estrades is situated in a well-established mining belt, which includes the former Casa Berardi gold mine (5 million+ ounces) , located 24 km the east of Galway’s land position and Maple Gold Mines Ltd.’s [MGM-TSXV] Douay Project (2.8 million ounces), which is located 15 km to the east. It means that 8 million ounces of gold has already been found on either side of the property.
Between 1990 and 1991, Breakwater Resources extracted 174,946 tonnes of material, grading 12.9% zinc, 6.4 g/t gold, 1.1% copper and 172.3 g/t silver from the site. But weak metal prices, together with high contracting and processing costs, forced the mine to close.
A mineral estimate prepared for the Estrades Project in September, 2018, indicates that the project hosts an indicated resources of 1.49 million tonnes, grading 3.55 g/t gold, 122.9 g/t silver, 7.20% zinc, 1.06% copper and 0.60% lead, as well as an inferred resource of 2.2 million tonnes, grading 1.93 g/t gold, 72.9 g/t silver, 4.72% zinc, 1.01% copper and 0.29% lead. The resource estimates are contained in a technical report prepared by Roscoe Postle Associates Inc.
The land package that Galway has acquired offers numerous opportunities for the company to expand the existing resource and to seek new discoveries, Galway has said.