Golden Tag Resources Ltd. [GOG-TSXV, GTAGF-OTCQB] shares advanced on Thursday after the company released impressive drilling results from ongoing exploration at its 100% owned San Diego silver project in Durango, Mexico.
Thursday’s press release detailed complete results from diamond drill hole 21-58, part of a program targeting bulk-tonnage mineralization.
The company said new high-grade skarn zones were intersected above the Fernandez zone resource envelope, including 306.09 grams per tonne silver equivalent (AgEq) over 6.55 metres and 257.67 g/t AgEq over 16.34 metres.
Hole 21-58 intersected 111 g/t AgEq over 191.57 metres within the Fernandez Zone, a step out of 102 metres to the north-northwest of hole 12-48 and 80 metres southwest of hole 12-49.
Golden Tag said the mineralization intersected in hole 21-58 within the Fernandez Zone was a 34% improvement in grades over the nearest intercept within hole 12-48, implying the western section of Fernandez could potentially host higher grades.
On Wednesday, Golden Tag shares advanced by almost 9.0% or $0.025 to 31 cents on volume of 247,760. The shares trade in a 52-week range of 65 cents and $0.13.
The San Diego property is among the largest undeveloped silver assets in Mexico and is located withing the prolific Velardena Mining District. Velardena hosts several mines having produced silver, zinc, lead and gold for over 100 years.
The 92-hectare property is located 75 kilometres southwest of the city of Torreon, and 4.0 kilometres northeast of Golden Minerals Co.’s [AUMN-TSX, NYSE American] San Juana Mine. Golden Minerals holds a 2% net smelter royalty interest in the San Diego property.
Golden Tag has said 33,000 metres of surface diamond drilling has been completed on the property since 2005. Silver occurs with lead and zinc sulphides and silver sulphosalts in a variety of environments, including numerous laterally and vertically continuous carbonate veins, stringer zones, disseminated zones, carbonate replacement zones; mantos and, at depth, very large skarn zones.
The discovery of high-grade skarn mineralization over sizable widths, commencing only 150 metres from surface, is an important advancement in the project,’’ said Golden Tag President and CEO Greg McKenzie.
“These newly discovered high grade mineralized zones reside only 185 metres above the Fernandez Zone and could potentially be accessed through conceptual shared development,’’ he said.
“Most importantly, we are very pleased to have drilled a step out hole to the west within the Fernandez Zone, intersecting 111 g/t AgEq over 191.57 metres, which resulted in a 34% increase in grade over the nearest intercept in hole 48.”
SGS (Canada) Ltd., using a geo-statistical approach to resource estimation, completed a 43-101 compliant resource study in 2013. Total indicated resources at the site stand at 31.61 million silver ounces or 55.52 million silver AgEq. ounces
On top of that is an inferred resource of 83.81 million ounces of silver or 159.93 million silver AgEq ounces.
According to SGS Canada, resources could potentially be expanded by 20-50 million tonnes grading from 100 to 150 g/t AgEq from existing structures, as well lateral and depth extensions.
One of four key targets mentioned in the SGS Canada report was the Fernandez zone, which is located between two major structures and is thought to offer bulk mining potential. The other three are the 1849 Target, the Trovodor, and Arrovo zones.