Reunion Gold Corp. [RGD-TSXV] shares rallied Thursday July 18 on news of a new high-grade gold find at the Saint-Michel prospect, which is part of the company’s Boulanger Project in north-central French Guiana.
Reunion has an option to acquire a 100% interest in the Boulanger Project from Compagnie Miniere de Boulanger (CMB). The option was recently amended to include the Saint-Michel prospect, which is located on a small-scale mining permit located north of the Boulanger concession.
On Thursday, the company said systematic sampling of 42 mineralized dumps located next to 47 artisanal shafts and adits scattered over an area of 260 metres by 95 metres returned an average grade of 17.3 g/t gold.
An induced polarization survey indicated two 600-metre long parallel chargeability anomalies, one of which coincides with the Saint-Michel artisanal workings.
Investors reacted by sending Reunion shares up 7.14% or $0.02 to 30 cents on volume of 614,578 share straded. The shares are trading in a 52-week range of 12 cents and 28 cents. Reunion recently agreed to embark on a strategic alliance with Barrick Gold Corp. [ABX-TSX; GOLD-NYSE] to explore, develop and mine mineral properties in the Guiana Shield.
Under the deal, the two companies pledged to form a 50:50 alliance that will cover certain mineral projects in Guyana, Suriname, French Guiana and the north and northeast regions of Brazil. Barrick committed to increase its stake in Reunion to 19.9% from 15%.
Reunion’s asset portfolio consists of six projects, including three in French Guiana and three in Guyana.
Reunion’s contribution to the alliance was the Waiamu, the Aremu, the Arawini, and the Oko projects, all of which are located in Guyana. In return, Barrick agreed to provide US$4.2 million to fund the initially included projects. This amount represents credit for the historical exploration and money already spent by Reunion. Subsequent funding will be on a 50:50 basis.
Reunion’s interest in the Dorlin, Haute Mana, and Boulanger Projects, (all located in French Guiana) were initially not included in the alliance.
However, Barrick retains the right of first refusal on these projects, and can in the future define any project, based on certain criteria, as a designated project, and would then, at that time, pay Reunion 50% of all costs incurred by Reunion on such designated project to that date.
In the last quarter of 2018, illegal artisanal miners had sunk several shafts and adits and reportedly produced significant amounts of gold from the Saint-Michel prospect. However, Reunion said the area was recently cleared of illegal activity by the French army and police.
The company said preliminary sampling of limited outcrop exposure returned assay results of up to 18.2 g/t gold from a grab sample and up to 26.6 g/t gold over a one-metre channel sample. It said systematic channel sampling of exposed outcrop is not possible due to the unstable and steep outcrop face.
“Our preliminary sampling of the Saint-Michel prospect shows some of the best gold grades our team has ever encountered in the Guiana shield and we look forward to systematically exploring this area as we move the Boulanger Project forward,” said Reunion President and CEO Rejean Gourde.
He said the company intends to carry out a drilling program at the Saint-Michel prospect to delineate the geometry and grade of the gold mineralization as soon as a license for exploration work has been obtained.