El Gallo Infill Drill Results & High Grade Mineralization Discovered
TORONTO, ON - US Gold Corporation reported assay results from several different areas at the El Gallo Project, located in Sinaloa State, Mexico, including: 1) infill drilling to the east, 2) an emerging high-grade zone to the southwest and 3) the Gold Zone.
Recent drilling at El Gallo has been focused on the eastern limits of the deposit. The objective was to increase the confidence associated with the inferred mineralization, which is expected to upgrade this portion of the resource to the measured and indicated categories and help establish a reserve for preparation of the ongoing feasibility study.
Four holes were drilled inside the proposed pit design. Holes GAX-349 and GAX-351 successfully confirmed the presence of the inferred mineralization and help demonstrate the impressive grades and thicknesses associated with the Main Zone.
Holes GAX-318 and GAX-333 were drilled with the objective of converting lower grade inferred mineralization. These holes encountered higher grades than anticipated. The original production study contemplated sending this mineralization to the heap leach pad, but with the increased grade, the mineralization would likely be processed at the mill, where higher silver recoveries and enhanced margins are expected.
The six holes were drilled to intersect inferred mineralization either adjacent to or below the proposed pit. Although this inferred mineralization was deemed to be uneconomic in the Preliminary Economic Assessment (PEA), the area was tested because 1) US Gold's geologists believed there was an opportunity to increase the grade and 2) higher silver prices since the release of the PEA could make this mineralization profitable to mine. Overall the holes achieved their objectives.
As drilling continues along the eastern limits of the deposit, a lower zone continues to be defined. This zone, which was initially discovered in 2010, is flat-lying and occurs 100 m (325 ft) below surface. Two recent holes have intersected this zone, helping to grow its size to the east and north. With limited drilling prior to the PEA, the eastern portion of this zone was excluded from the production study. Further drilling will help determine its ultimate size and economics.
The company previously announced that high-grade silver and gold mineralization had been intersected 400 m (1,300 ft) southwest of the resource. The initial hole retuned 2,400 gpt silver, 39.3 gpt gold over 0.6 m. Three additional holes have since been drilled. The first two holes, drilled to establish the orientation of the vein, intersected the zone but returned lower grades. The third hole, drilled to extend the mineralization to the east, returned additional high-grade. Although more drilling is required, the results demonstrate the potential to develop a new high-grade zone at El Gallo.
The El Gallo Gold Zone is situated 200 m (655 ft) southeast of the resource. The original interpretation was that the area was comprised of two mineral structures, with a near-surface gold-rich zone and a silver zone at depth. New drilling has intersected another gold occurrence below both of the previously known zones. The result is encouraging as it suggests there is potential for mineralization at depth, which has seen limited exploration. To date, ten holes have been completed in this area.
Exploration around El Gallo since the feasibility study was initiated has returned promising results, including areas that are currently proposed for future mine site facilities. Many of these areas have not been thoroughly tested due to the on-going infill drilling program. US Gold has decided to shift half of its drilling to pursue these targets with the goal of further enhancing the project.
The company's address is 99 George Street, 3rd Floor, Toronto, ON M5A 2N4, (647) 258-0395, fax: (647) 258-0408.