Promontorio drilling delivers for Kootenay Gold

VANCOUVER — Continued good news out of the Promontorio silver-gold- lead-zinc project in Sonora, Mexico, once again buoyed Kootenay Gold’s (KTN-V, KOOYF-O) share price in a lagging market.

The latest set of results again show strong precious and base metal mineralization over considerable lengths. Hole 23, drilled from the northwest corner of the zone, returned 437.5 metres grading 28.2 grams silver per tonne, 0.44 gram gold, 0.53% lead and 0.63% zinc essentially from surface. From the centre of the zone, hole 25 returned a similarly lengthy intercept: 386.6 metres of 46.15 grams silver, 0.44 gram gold, 0.78% lead and 0.76% zinc, also from surface.

The company has released results from 36 holes drilled during the current program and long, well-mineralized intercepts are the norm. Hole 26, collared in the northeast corner of the zone, returned 187.8 metres of 36.94 grams silver, 0.53 gram gold, 0.65% lead and 0.66% zinc from 176 metres down-hole. From north of centre in the zone, hole 27 cut 420 metres of 31.86 grams silver, 0.43 gram gold, 0.57% lead and 0.67% zinc from surface. Nearby, hole 29 cored 268 metres of 28.49 grams silver, 0.42 gram gold, 0.54% lead and 0.65% zinc from 166 metres depth.

Stepout holes have generally returned strong results as well. In a 120-metre stepout to the west, hole 35 returned 97.4 metres of 50.79 grams silver, 0.4 gram gold, 0.97% lead and 1.24% zinc from 287 metres. Hole 33, a 100-metre step to the north, hit 131.4 metres grading 42.21 grams silver, 0.5 gram gold, 0.6% lead and 0.71% zinc from 164 metres depth, followed by 75.6 metres of 37.17 grams silver, 0.45 gram gold, 0.68% lead and 0.68% zinc from 311 metres depth. And a 100-metre step to the south returned 69.3 metres of 30.46 grams silver, 0.39 gram gold, 0.38% lead and 0.41% zinc from 215 metres in hole 34.

The latest set of drill results lifted Kootenay Gold’s share price 9 to close at $1.80, but at presstime, the stock had declined to $1.49. The company has a 52-week trading range of 85-$2.75 and has 28.6 million shares issued.

Mineralization at Promontorio occurs as pyrite, galena, sphalerite, and possible silver sulfosalts within veins, veinlets, fractures, disseminations, and as breccia infilling. Significant mineralization has now been observed in diorites and sediments, in addition to the andesite.

Kootenay Gold’s success prompted the company to add a second drill rig to the project. One rig remains on the discovery zone; the other will be deployed to test the induced-polarization (IP) anomaly to the east.

To date, the discovery zone has been traced over 300 metres of strike, 200 metres of width, and to 440 metres depth; it remains open to the west, north, and east and at depth. And exploration has only probed some 10% of the IP target, which comprises a large L-shaped area of chargeability.

After closing a $12.4-million financing in mid-June, Kootenay Gold is currently carrying some $20 million in its treasury, which the company says is enough to finance two to three years of exploration at Promontorio.

Promontorio sits on the western margin of the Sierra Madre Occidental rhyolite volcanic belt and is accessible by road in the dry season from Ciudad, a sizable city 75 km southwest. The project has seen sporadic exploration and limited production over the last 100 years but Kootenay Gold’s effort there represents the first thorough exploration program at the site.

The company is also working to advance the Jumping Josephine gold project, a joint venture with Astral Mining (AST-V, ASMGF-O), as well as the Conner Creek property, a joint venture with Amador Gold (AGX-V, ADRGF-O). Both are located in southeast B. C.

Kootenay Gold and Astral have released results from the first five holes of a 30-hole, 5,000-metre program. All five were infill holes designed to block out near-surface mineralization on the main JJ discovery zone. Strong results came from hole 70, which cored 7.5 metres of 10.05 grams gold from just 5 metres depth; in hole 72, which cut 4 metres averaging 13.23 grams gold from 29 metres; and in hole 74, which returned 8 metres of 8.31 grams gold from 11 metres.

Preliminary results from a recently completed 3-D IP survey at Jumping Josephine show a large zone of elevated chargeability that occurs directly below and aligned with the JJ structure. The deep chargeability anomaly extends 1 km north of current drilling.

At Conner Creek, the JV partner recently completed a 1,850-metre drill program testing three target areas. The EM zone, selected because of a strong electromagnetic conductor, saw six holes. The best intercept came from hole 2, which cut 4 metres grading 1.12 grams gold, including 1 metre of 2.1 grams gold.

At the CC target, strongly sheared and sulphide-bearing metasediments on surface returned prospective gold grades. From the drilling, the best results came from hole 7, which returned 0.55 gram gold over 2 metres. And at the True Fissure- Root target, which comprises an old working on a high-grade vein and a massive sulphide skarn zone close to each other, drills failed to intersect the extension of the high-grade vein but hole 13 returned 1.7 metres grading 0.7 gram gold from the skarn.