Vancouver – Drilling by Queenstake Resources (QRL-T, QEE-X) at its Starvation Canyon project in northeastern Nevada has delivered a wide intercept of high-grade gold.
A 43-metre interval (from 85 metres depth) grading 16 grams gold per tonne was intersected in hole TJ-248 and included a higher grade section of 12 metres averaging 30 grams gold. The vertical reverse circulation (RC) hole was drilled between two known resource blocks and could represent a new northwest trending gold-bearing structure.
Starvation Canyon, located about 20 km southwest of the company’s main Jerritt Canyon mining complex, contains a measured and indicated resource of 614,000 tonnes grading 9.6 grams gold hosted in two northwest trending zones extending over 500 metres and remains open in a number of directions.
With an exploration budget of US$3 million this year at Starvation Canyon, Queenstake plans to add a diamond core rig to the two RC rigs currently drilling at the project. Additionally, step-out holes are also planned to test the west zone extension potential. Low sample recoveries from the RC drilling have hampered testing of some targets on the project.
Queenstake president and CEO Dorian (Dusty) Nicol stated, “With a very large area of favorable geology for exploration drilling, we are optimistic about resource additions at Starvation Canyon and advancing the project to production within the next two years. We are currently evaluating development of an exploration drift that could more rapidly advance the project from underground drill platforms. Preliminary designs indicate that an 800-foot drift would reach the known boundary of the west zone. We expect to make a decision regarding the exploration drift in the fourth quarter of 2006.”
Shares of the Denver-based gold producer gained 2.5 in TSX trading to close at 41 apiece. The company has a $237-million market capitalization based on its 578 million shares outstanding.
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