Corvus shares surge 50% on Nevada gold

Corvus Gold (KOR-T) has started the year with a bang. Positive assay results from its North Bullfrog gold-silver project outside of Beatty, Nev., combined with a sunny outlook for gold juniors, helped push the company’s share up 50% since the new year to a six-month high of 84¢ per share.

Corvus was formed in August 2010 when International Tower Hill Mines (ITH-T, THM-X) transferred its portfolio of exploration properties in Nevada and Alaska to the company. AngloGold Ashanti (AU-N) still owns a 12.55% stake in Corvus.  

Preliminary results from this year’s first-phase drill program on the North Bullfrog project were released in mid-February. The property is home to four gold targets: Jolly Jane, Mayflower, Connection and Sierra Blanca. 

At a 0.2-gram-per-tonne gold cut-off, Jolly Jane has an indicated resource of 10.1 million tonnes carrying 0.29 gram gold, or 159,000 contained oz. gold. Mayflower has an indicated resource of 5.1 million tonnes with 0.54 gram gold. According to a December 2011 technical report, Sierra Blanca has an inferred resource of 61.8 million tonnes grading 0.27 gram gold, or 1.9 million contained oz. gold at a 0.2 gram cut-off.

The initial reverse-circulation portion of the program included nine holes totalling 1,700 metres. Sierra Blanca was tested with 400-metre stepouts to the south and west, with additional 150-metre stepouts encountering more gold. Results are pending on holes drilled 200 metres and 400 metres northwest of the Jolly Jane zone. 

Hole 117 was a stepout located 400 metres west of the Sierra Blanca target that encountered 52 metres grading 0.8 gram gold, as well as 15 metres carrying 2.36 grams gold beginning 11 metres below surface. The company notes that the new gold mineralization is in the Crater Flat Tuff geological unit, which it speculates may be connected to the Sierra Blanca resource.

Corvus also started a diamond drilling program at North Bullfrog in early February. The primary target is the recently discovered Yellowjacket feeder zone on the property’s northeastern portion. Previous results were highlighted by a 12-metre intersection carrying 5.9 grams gold and 5.2 grams silver, and 6 metres of 11.9 grams gold and 8.8 grams silver.

The company has increased the 2012 exploration budget to $1.35 million, and expanded the 2012 drill program to 12,000 metres. A feasibility study on a proposal using run-of-mine material for heap leaching gold is expected to be filed in March 2012.

Corvus inherited two additional gold-silver properties near Sumitomo Metal Mining’s Pogo mine — Alaska’s largest producing gold mine. 

The West Pogo gold project is 5 km east of the Pogo mine. The company completed a 3-D induced-polarization survey and surface sampling on the project in 2011. A discovery drill program is slated to begin before July. 

Located in the Goodpaster-Pogo mining district, the LMS gold-silver project returned 15 intercepts greater than 10 grams gold, including hole 6-29 with 1 metre carrying 1,540 grams gold during a 2006 drill campaign.   

In early February 2012, Corvus released assays from the 2011 drill program on the LMS project. The results extend the downdip continuity of Camp Breccia — a mineralized, stratiform black breccia body — by 800 metres. The program included intersections of 3 metres carrying 12.5 grams gold and 12.4 grams silver at hole 10-38, 13 metres carrying 2.5 grams gold and 12.4 grams silver at hole 10-39 and 2 metres carrying 2.7 grams gold and 41.7 grams silver at hole 11-43. Soil sampling in the area generates targets for further 2012 exploration.

The company recently installed a pilot-scale mill at its joint-venture Terra gold-silver project in West Alaska’s Hartman mining district to process bulk gold samples.

Corvas optioned the project to WestMountain Index Advisors in September 2010 under a joint-venture agreement that entitles Corvas to a net smelter return royalty of 0.5% to 5% on all precious metal production, and a 1% royalty on all base metal production. 

The project has a 428,000-tonne inferred resource at 12.2 grams gold and 23.11 grams silver, or 168,000 contained oz. gold and 318,000 contained oz. silver at a 5-gram gold cut-off grade. A second-phase drill program is scheduled for later this year. 

International Tower Hill spun out Corvus to focus on developing its Livengood gold project in Alaska’s Tintina gold belt. At US$1,400 per oz. gold, Livengood has a 933-million-tonne measured and indicated resource at 0.55 gram gold, or 16.5 million contained oz. gold.  

Corvus continues to diversify its exploration activities with February’s Gerfaut gold property acquisition in northern Quebec. The project was explored in 1996 by Falconbridge, which found gold intercepts and potential for copper mineralization.  

Corvus has 41.66 million outstanding shares with a market cap of $35 million.