Placer Dome in second phase drilling at Mexican Hat

Oneida Resources (VSE) began exploring the gold prospect early this year, and its work led to the discovery of a large zone of alteration and anomalous gold in an area of mid-Tertiary volcanics.

The fourth hole drilled on the property encountered 60 ft of 0.280 oz gold per ton. That, combined with multiple lower grade gold intercepts in other holes, indicated potential for a near-surface bulk tonnage target.

Placer Dome U.S. entered into a joint venture with Oneida in May with the purchase of 400,000 Oneida shares at $1.75 per share. Since then, the major mining company agreed to buy an additional 600,000 shares at $2.25 per share. Upon fulfilment of the option, Placer Dome U.S. would vest 60% equity in the Mexican Hat property.

Selected drill results from the first-phase program include: 400 ft of 0.074 oz gold per ton; 60 ft of 0.080 oz; 130 ft of 0.045 oz; 100 ft of 0.109 oz; and 160 ft of 0.037 oz.

The second-phase program consists of detailed geological mapping, trenching, geochemical sampling and drilling. Both core and reverse circulation drill rigs will be used to drill a total of 34,000 ft.

Results are in for the first two core holes. Hole MHC-7 returned 15 ft of 0.083 oz gold; 12 ft of 0.038 oz; 50 ft of 0.037 oz; and 50 ft of 0.040 oz. MHC-8 returned 10 ft of 0.090 oz; 5 ft of 0.210 oz; 15 ft of 0.041 oz; 50 ft of 0.064 oz and 65 ft of 0.084 oz. Intercepts from the first three reverse circulation holes are: 25 ft of 0.042 oz; 35 ft of 0.057 oz; 25 ft of 0 .99 oz; and 10 ft of 0.030 oz.

According to Oneida, six major gold-bearing zones have been identified on the property to date.

The company said the second- phase program is aimed at testing the continuity and extent of five high-angle sheeted zones; testing the near-surface portion of the low- angle Victoria fault zone; and identifying and testing new target areas on property.

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