Radius Gold down 32% on Mexico update

Exploration Manager, Bruce Smith and Chief Geologist, Rodrigo Matias during the discovery of Amalia. Source: Radius Gold Inc.

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Radius Gold Inc. [RDU-TSXV; RDUFF-OTC] shares were active Tuesday May 28 after the company released an update on its exploration efforts at the Amalia gold-silver project in Chihuahua, Mexico, where Pan American Silver Corp. [PAAS-TSX, NASDAQ] has the option to earn up to a 75% interest.

The company said it has now completed drilling of six diamond drill holes (AMDD19-010 to AMDD19-015) totaling 1,743 metres, with assays returned from three holes (010,011, 012). New results include Hole 012 which assayed 5.0 metres at 647 g/t silver, intersected 50 metres below the Phase one Hole 008 which returned 5.0 metres of 0.59 g/t gold and 571 g/t silver.

Investors reacted by sending Radius shares down 32.3% or $0.105 to 22 cents on active volume of 1.15 million. The shares trade in a 52-week range of $0.09 and 46.5 cents.

That marks a big contrast to the reaction to the first results from the second round of diamond drilling which were announced on May 1, 2019. On that day the shares jumped 139.29% or 19.5 cents to 33.5 cents on heavy volume of 10.4 million shares traded.

In the May 1, 2019 news release, the company said the first hole of 2019, AMDD19-010 intersected 22 metres, grading 12.38 g/t gold and 309.3 g/t silver, including an 11-metre section that averaged 39.9 g/t gold and 323 g/t silver.

The Amalia Project is located 25 km southwest of the historic Guadalupe y Calvo mining district in Chihuahua. Radius geologists discovered high-grade epithermal silver-gold mineralization in several veins, vein breccias and disseminated zones over 3.5 km of strike length and a 750-metre vertical interval after tracing a large regional fault zone.

Radius initially acquired the 380-hectare core license and subsequently staked an additional 9,070-hectare regional license covering multiple target areas. The Amalia gold-silver project is part of a basket of projects that Radius has acquired in the U.S. and Mexico, and which it continues to advance, utilizing partnerships, where necessary in order to conserve cash.

On Tuesday, the company said the Phase two drill program is now complete. It said the program has expanded multiphase gold and silver mineralization with two high-grade ore shoots identified to date along the San Pedro structure. Geological controls on the mineralization are complex with multiple events of gold and silver mineralization within the veins, stockworks and hydrothermal breccias.

The dominant San Pedro structure trends 320/60E and can be traced for several kilometres. The San Pedro is a large robust fault zone separating Tertiary rhyolitic ignimbrites from the Late Cretaceous Tarahumara formation with gold and silver mineralization typically occurring within the hanging wall.

Exploration drilling at this stage is wide spaced and large areas remain untested. With drilling on just five sections covering 850 metres of strike length and testing a vertical component limited to approximately 200 metres down dip, Radius believes the system is still wide open and shows potential for a significant discovery.

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