Capella Resources hits long intercept at Lajitas in Chile

Drilling at Capella Resources‘ (KPS-V, CPSJF-O) Lajitas gold project, about 700 km northwest of Santiago in Chile and 5 km from the country’s border with Argentina, has intersected 318 metres of gold at 0.68 gram gold per tonne, including 140 metres at 1.02 grams gold, the junior reports.

Drill hole LJ10015r yielded the most continuous gold mineralization intersected so far on the property and oxidation extended throughout the entire depth of the hole, a big positive in terms of metallurgical processing.

The news however failed to push the stock higher, closing down 4¢ or 9.1% at 40¢ a share.

“It’s unfortunate we didn’t get a bit of a lift with our stock price,” Graham Johnstone, head of investor relations, told The Northern Miner.

“Last year in April we came out with a result of 261 metres grading 0.91 gram gold – a little higher — including 104 metres of 1.59 grams gold and we hit $1.70 per share in two days trading. We were the hottest stock on the TSX Venture Exchange.”

Lajitas is in the Maricunga gold belt, which is known to host more than 43 million oz. gold. The property is about 12 km southwest of Kinross Gold‘s (K-T, KGC-N) Marte-Lobo mine, 25 km east of Andina Mineral‘s (ADM-V) Volcan project, and about 60 km northwest of Exeter Resource‘s (XRC-T, XRA-X) Caspiche project.

(In October 2008 Andina reported its Volcan deposit contained 6.62 million oz. gold in the measured and indicated category and 3.28 million oz. gold in the inferred category.)

The Maricunga belt is a north-northeast trending chain of andesitic to dacitic volcanoes measuring about 150 km from north to south and 30 km in width, hosting a series of epithermal high-sulphidation and porphyry-style gold-silver-copper deposits.

Deposits in the district are predominantly porphyry gold stockwork systems and are contained within advanced argillic alteration zones that locally host high-sulphidation epithermal gold deposits.

Mineralization at Lajitas in drill hole LJ10015r remains open to the north, east, and at depth, and lies under a mineralized outcrop. Gold mineralization is hosted in diorite porphyry.

The company notes that the mineralization intersected appears to connect with mineralized surface outcrops indicating the possibility of low-strip ratio in a mining scenario.

“We think the mineralization outcropping at surface, the positive topography and the metallurgy will all be positive factors for an open-pit should that develop,” Richard Buchman, the company’s chief executive and principal geologist, remarked in an interview.

Additional step-out holes to the north are planned and operations are expected to recommence in early February.

Buchman says his goal is to complete a National Instrument 43-101 compliant resource on Lajitas by August. “If we can produce similar holes to the north we think we can easily get to 1 million oz. gold.”

In addition to Lajitas, Capella owns the Nevada property, also in the Maricunga district, which shares a border with Exeter’s Caspiche project.

Together the two properties are made up of ten exploration claims and six exploitation claims over an area of about 35 sq. km.

“We’re quite pleased with what we’ve got,” Johnstone says. “We’re right in this elephant country of low-grade bulk tonnage properties.”

The company also holds a 100% interest in the Tinton gold project, 15 km northwest of the legendary Homestake mine in the Black Hills region of South Dakota, which produced 40 million oz. gold between 1876 and 2001. The Tinton property consists of 12.7 sq. km contained in 157 unpatented mining claims.

Finally Capella holds 3839 mineral exploration claims covering an aggregate land area of more than 715.6 sq. km in Nova Scotia, New Brunswick and Newfoundland and Labrador.

Over the last year Capella has traded in a range of 8¢-$1.70 and has 28 million shares outstanding.