Galway follows drill results with financing

Vancouver – Galway Resources (GWY-V) has released a number of significant gold-silver hits from its California project in Colombia just as it announces a $25 million financing.

The latest results come largely from the Pie de Gallo zone, a 300-metre long historic open pit, with some drilling also conducted on the NE zone, which sits on the eastern boundary of Galway’s project. The NE zone also happens to sit adjacent and along strike to Ventana Gold’s (VEN-T) La Bodega/La Mascota property, while Greystar Resources’ (GSL-T) Angostura project is 3 km northeast.  

From Pie de Gallo, hole 62 cut 24 metres grading 8.42 grams gold from 78 metres downhole and 4.5 metres carrying 20.04 grams gold from 242 metres; hole 56 hit 10.5 metres grading 5.18 grams gold per tonne from 79 metres; hole 57 returned 4.5 metres grading 10.86 grams gold from 38 metres depth; and hole 59 cut 25 metres grading 2.41 grams gold and 227.69 grams silver.

From the NE Zone, hole 55 returned 70 metres averaging 1.73 grams gold and 17.99 grams silver from 39 metres and hole 58 cut 96 metres grading 1.65 grams gold and 17.54 grams silver.

In early November Galway released further results from Pie de Gallo. There, hole 54 hit 19.5 metres grading 11 grams gold and hole 53 cut 5 metres carrying 26 grams gold.

The 560-hectare California project also hosts the San Celestino zone, which sits 1 km southwest along strike to the Northeast zone. The latest release did not include any results from the zone, but in the past Galway has pulled 11 metres grading 9.9 grams gold and 7.2 metres grading 7.6 grams gold.

The day after releasing the latest results, Galway announced a $25 million financing consisting of 25 million units at a dollar each. Units hold both a share and a half-warrant, with full warrants exercisable at $1.50.

 At the same time, the company announced it intends to spin out its Vetas gold project into a newly-formed, wholly-owned subsidiary. Galway only secured the mostly contiguous 542 hectares that forms the Reina de Oro and Coloro properties, also known as the Vetas project, in January.

 The project hosts the El Volcan mine, for which Galway had been working to secure drilling permits. The site sits roughly 8 km southwest of the California trend and Galway expected to being drilling in Q1 of 2011. Further details on the spin-out are pending.

Along with spinning out its January land acquisition, Galway reiterated that it holds fractional concessions within Ventana’s project, including a 360-metre long concession within the main La Mascota structure. Galway sited the recent $1.2 billion unsolicited bid for Ventana as the reason for the reminder.

Galway only gained control of the fractional concessions, along with the California project, in May. The two land deals near the start of the year marked a major refocusing of the company, switching from a molybdenum-tungsten focus to Colombian gold.  

Galway’s share price closed up 11¢ at $1.11 the day the latest drill results were released and was halted mid-way through trading the next day at $1.12. The company has a 52-week share price range between 63¢ and $1.80 and 81 million shares outstanding.