Goldsource Mines up 50% on Guyana exploration results

The Phase 1 pilot plant at the Goldsource Eagle Mountain gold project in Guyana, South America. Source: Goldsource Mines Inc.

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The Phase 1 pilot plant at the Goldsource Eagle Mountain gold project in Guyana, South America. Source: Goldsource Mines Inc.

Shares of Goldsource Mines Inc. [GXX-TSXV; GXSFF-OTCBB; G5M-FSE] jumped 50% in early trading Thursday May 24 after the junior announced details of a new discovery and further positive results from its ongoing saprolite exploration program at its 100%-owned Eagle Mountain Project in Guyana, South America.

Investors reacted positively to the news, driving Goldsource up $0.03 to 9 cents on volume of 1.28 million. The 52-week range is $0.05 and 13.5 cents.

The company’s goal is to become a low cost gold miner in Guyana within the next three years, producing between 50,000 ounces and 70,000 ounces annually from a 4,000 to 5,000 tonne-per-day open pit operation.

Its immediate focus is on increasing the saprolite resources to a minimum of 600,000 ounces, grading 1.0-1.5 g/t gold via expansion and in-fill drilling which began in late May 2017. The company said it hopes to deliver a NI 43-101 compliant pre-feasibility study by the second half of 2018.

Eagle Mountain hosts an NI 43-101-compliant indicated resource (hosted by saprolite (oxide), and non-oxidized rock) of 3.9 million tonnes at 1.49 g/t gold or 188,000 ounces. On top of that is an inferred resource of 20.6 million tonnes at 1.19 g/t gold or 792,000 ounces. This resource estimate has an effective date of June 15, 2014.

On Thursday, Goldsource said the new discovery in an area known as Salbora is located approximately 1.5 km northwest of the Eagle Mountain deposit. The company also said it has received positive results on a previously announced expansion target located at the northern edge of the Eagle Mountain deposit in the so-called “Friendly” area.

In addition to expansion drilling, the company is conducting in-fill drilling, geotechnical evaluation of a potential tailings storage area, and metallurgical test work in order to update the resource estimate for the ongoing pre-feasibility study.

“We are encouraged with the recent results from the drilling and trenching campaigns at Eagle Mountain,” said Goldsource President Yannis Tsitos. “This discovery of potentially a higher-grade zone at the Salbora area along with continued success in expanding mineralization on various targets including Friendly and positive results from the Kilroy and Zion areas, are supportive of the potential to grow the resource based of Eagle Mountain to support a large scale gravity cyanidation operation,” he said.

The most significant result announced on Thursday was from Trench TRSB18-002 at the Salbora area, which intersected 123 metres grading 1.92 g/t gold.  Also noteworthy are drill hole EMD18-011, which returned 6.0 metres, grading 1.51 g/t gold in the Friendly area; Hole EMD18-018, 21.4 metres grading 1.22 g/t gold, and Hole EMC18-057, 8.0 metres grading 2.65 g/t, which are in-fill holes in the Kilroy and Zion areas respectively.

The Eagle Mountain Project is located 230 km southwest of Georgetown, the capital of Guyana. It can be accessed by existing road or via a commercial airport, which is 7 km from the project site. Eagle Mountain is also located 45 km southwest of the former Omai gold mine, which produced 4 million ounces of gold between 1993 and 2005.

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