El Gallo continues to shine for US Gold

Drilling at US Gold‘s (UXG-T, UXG-X) El Gallo project in Mexico has extended mineralization to the south of the main zone by as much as 50 metres with the best drill hole encountering two separate zones and returning 576.9 grams silver per tonne over 24 metres and 142.3 grams silver over 12.8 metres.

The latest fifteen drill holes were designed to boost the number of ounces beyond the National Instrument 43-101 resource estimate released on July 6 at the low-sulfidation, epithermal silver deposit, about 240 km south of Pan American Silver‘s (PAA-T) Alamo Dorado, one of the world’s largest primary silver mines.

Highlights of the latest drilling include holes GAX-186, which cut 112.9 grams silver over 15.2 metres, and GAX-188, which returned 122.2 grams silver over 10.4 metres. GAX-199 returned 187.8 grams over 2.8 metres.

Three additional holes have encountered near-surface oxide mineralization. Hole GAX-176 returned 32.3 grams silver over 22.4 metres; GAX-182 returned 26.1 grams silver over 13.5 metres; and GAX-196 returned 57.9 grams silver over 9.4 metres.

During the second half of the year, US Gold says it will attempt to identify more near-surface areas containing lower grade mineralization that may be amenable to heap leach recovery. Five additional holes have been completed about 50 metres east of the current limits of the resource and assay results will be released in August.

According to El Gallo’s initial resource estimate, the deposit has measured and indicated resources of 7.4 million tonnes at an average grade of 106 grams silver per tonne and 0.09 gram gold per tonne for contained silver of 25.1 million ounces and contained gold of 21,165 ounces. Inferred resources add 4.5 million tonnes at an average grade of 84 grams silver per tonne and 0.002 gram gold for 12.2 million oz. silver and 9,346 oz. gold.

Importantly, 93% of the measured and indicated resource and 94% of the inferred is less than 100 metres below the surface.

Drilling has also has returned “encouraging results” at a prospect 14 km from El Gallo in the Sierra Madre Occidental Range called Las Milpas, where three of four core holes intersected shallow silver mineralization. Another six holes will be drilled over the next two weeks.

In Toronto, US Gold shares finished the day at $4.79 per share, down 11¢ or 2.24%. The company has had a 52-week trading range of $2.16-5.63 per share and has about 116.3 million shares outstanding.