Volcanic Gold Mines Inc. [VG-TSXV, VLMZF-OTC] shares rallied in active trading Friday after the company said drilling results from the La Pena vein at the Holly Project in Guatemala had returned high-grade gold values.
Drilling highlights included Hole HDD-21-004 at the La Pena Vein, which intersected 14.8 metres at 3.96 g/t gold and 1,097 g/t silver. This is the deepest intercept on the La vein system to date with silver grades increasing with each step down, the company said in a press release.
Volcanic Gold mines shares jumped 24.7% or $0.105 to 53 cents on volume of 689,140. The shares are currently trading in a 52-week range of 93 cents or 33.5 cents.
Volcanic has said it intends to become a leading gold-silver company.
The company has acquired an option on a large land position in Eastern Guatemala from Radius Gold Inc. [RDU-TSXV]. Volcanic can earn a 60% interest in the Holly and Benderas projects by spending US$7.0 million on exploration of the properties within 48 months of the date of the agreement.
Under the agreement, an initial US$1 million must be spent on exploration, including 3,000 metres of drilling within within 12 months of receiving the required drill permits.
After the option is exercised, Volcanic will enter into a standard 60/40 joint venture in order to further develop the properties.
Radius Gold shares also advanced on the news, rising 19.2% or $0.045 to 28 cents on volume of 274,820. The shares currently trade in a 52-week range of 38 cents and 20.5 cents.
The Holly property straddles the regional Jocotan Fault, which forms part of the Motagua Suture Zone, 400 kilometres long by up to 80 kilometres wide deformation zone that separates the North American and Caribbean plates.
Radius has previously discovered multiple high grade gold and silver occurrences along and crosscutting this portion of the Jocotan. It has also had some success with drilling on these targets so far. Highlights include 6.00 metres at 43.56 g/t gold and 1,618 g/t silver.
On Friday, Volcanic said that below the La Pena vein, drill hole 4 cut a zone of disseminated silver mineralization grading 378 g/t silver over 9.15 metres within the footwall of the vein. This silver mineralization was finely disseminated in altered volcanic rocks without significant veining.
“It is great to see La Pena vein developing as a robust gold/silver system,” said Volcanic President and CEO Simon Ridgway. “We are currently drilling hole HDD-21-021, stepping out along strike of La Pena vein which does not appear to be a narrow shoot,’’ he said.
Volcanic also has an exclusive right to evaluate Radius’s other property interest in Guatemala and acquire an interest on the other properties under reasonable terms.