US Gold cuts shallow gold at Hercules

US Gold (UXG-T, UXG-x) has made a new, near-surface gold discovery in the Magistral district of Sinaloa state, Mexico.

The discovery, named Hercules because of its strong potential, says the company, is about 32 km southeast of the past-producing Magistral mine and 160 km north of Culiacan.

Drilling intersected 4.6 grams gold per tonne over 30 metres in hole 11 starting at surface, including a 6-metre section grading 17.6 grams gold.

Meanwhile, hole 19 returned 27 metres grading 3.9 grams gold starting at a depth of 3 metres, including a 9-metre section grading 5.2 grams gold per tonne. Other holes returned lower grades. Hole 20 intersected 30 metres of 2.2 grams gold starting at 6 metres, and hole 18 returned 30 metres of 1.3 grams gold, starting at 3 metres.

Other drilling on the same zone on the Hercules property, dubbed the H1 zone, consisted of four holes (holes 50 to 53) that returned grades of 1.4 to 2 grams gold over 21 to 33 metres starting at near-surface depths of 3 to 15 metres. Drilling on the H2 zone, located 1 km from the H1 zone, included three holes (hole 30, 31 and 36), which returned grades of 1.1 to 14.5 grams gold over 1.5 to 19.8 metres. All the holes were drilled vertically by rotary air drilling to a maximum depth of 36 metres, and since five holes ended in mineralization, a deeper drilling program will start shortly.

The mineralization is part of a hydrothermal vein system with significant silicification and oxidation, and the main minerals present are quartz, pyrite, hematite and limonite. The Hercules property is part of US Gold’s 2,185-sq.-km land position in the Magistral district.

The Magistral project, which consists of 96 sq. km, is located 32 km northwest of the Hercules property. Magistral is a former open-pit, heap-leach gold mine that produced 70,000 oz. gold between 2002 and 2005. Recent exploration at Magistral returned 9.4 grams gold per tonne over 34 metres.

Gold mineralization is found along a series of structural zones that cut the volcanic sequence. Individual zones consist of sheared and faulted volcanic rock that host variable stockwork, breccia and local quartz veins. Gold and silver minerals are present in microscopic-sized particles of native gold and electrum associated with quartz. Gold mineralization may also be related to a series of rhyolite domes.

In 2004, a gold-silver-copper porphyry was discovered 2 km from the mine site. The deposit is close to the intersection of three structural trends. The area contains a package of intensely altered intrusive and volcanic rocks that host mineralized structures con taining both silicified vein and stockwork zones. Along the contact of the two units, there are irregular quartz breccias anomalous in gold, silver, copper and bismuth.

US Gold has identified seven exploration targets in the area of the past-producing Magistral mine, the highest-priority one being La Prieta. One hole at La Prieta returned 18.3 metres of 3.3 grams gold per tonne. Measured and indicated resources at Magistral total 540,000 oz. gold.

Palmarito, another project in the Magistral district, has returned high-grade silver intersections. One hole returned 9.5 metres of 314 grams silver per tonne; another cut 9.1 metres of 539 grams silver; and a third intersected 19.8 metres grading 191 grams silver. US Gold says the recent results have expanded the main zone by 95 metres to the northeast and 32 metres vertically. Grades appear to increase at depth, suggesting thatdrilling may be coming close to a possible feeder system, the company said in a statement.

In addition to its projects in the Magistral district in Mexico, US Gold also holds the Limo, Tonkin, and Gold Bar projects in Nevada. The company’s total measured and indicated resources in Nevada stand at 1.4 million oz. gold, while inferred resources are 440,000 oz. gold.

US Gold has 76.2 million shares outstanding and had cash and equivalents of US$22 million on June 30.