Radius Gold Inc. [RDU-TSXVl; RDUFF-OTC] shares rallied sharply Wednesday May 1 after the company released drilling results from 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.
Wednesday’s news release contains details of the first results from the second round of diamond drilling. 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 estimated true width of the mineralized zone is 34 metres.
Radius shares rallied on the news, jumping 139.29% or 19.5 cents to 33.5 cents on heavy volume of 10.4 million. That made Radius the volume leader on the TSX Venture Exchange. The shares were previously trading in a 52-week range of $0.09 and 19.5 cents.
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 which it continues to advance, utilizing partnerships, where necessary in order to conserve cash.
Back in December 2018, the shares rallied strongly when Radius said five drill holes tested the Campamento-San Pedro structural corridor, intercepting gold mineralization in all holes with the deepest hole cutting 26 metres of 7.08 g/t gold and 517 g/t silver in drill hole (AMDD18-009).
On Wednesday, Radius said hole AMDD19-101 intersected the San Pedro structure approximately 65 metres down dip from the intersection reported in drill hole AMDD18-009.
Mineralization observed in both 009 and 010 is hosted within an epithermal breccia and quartz sulphide stockwork vein zone located on or near to the contact between overlying tertiary rhyolitic ignimbrites and the footwall andesite volcaniclastics of the Late Cretaceous Tarahumara Formation.
Drilling is continuing at Amalia with holes in progress stepping out 100 metres along strike and 50 metres or more below known mineralization. At this stage, 2,000 metres is budgeted and funded by Pan American Silver under a joint venture agreement, dated August 27, 2018.
Radius granted Pan American the option to earn an initial 65% interest in the Amalia Project by making cash payments to Radius of US$1.5 million and spending US$2 million on exploration over four years.
Pan American can earn an additional 10% stake by advancing the property to a preliminary feasibility study. Radius is currently the project operator.