Vancouver — Upstart miner San Gold (SGR-V, SGRCF-O) got a pleasant surprise after tying into a high-grade section of the 98 vein at its Rice Lake mine near Bissett, in southeastern Manitoba.
Vein sampling along the face of the drift and on raise development at the 29th level (about 4,400 ft. below surface) delivered a higher-than-expected average diluted grade of 35.6 grams gold per tonne over a strike length of 91.5 metres. The vein had an average true width of 1.8 metres and contained significant coarse, visible gold.
The discovery indicates the potential for additional high-grade sections within planned development blocks at the deep mine. Previous studies pegged the 98 vein as containing a measured and indicated resource of about 90,000 tonnes grading 12 grams gold.
The mineralized vein, initially identified during mining in the 1960s, is a shear-hosted tabular quartz vein located at the easternmost edge of development on level 29. Development work on the structure was conducted in advance of planned production from the zone.
Underground drilling from the 5,300-ft. level has also recently identified a new gold-bearing breccia vein. Hole 473-06-110 intersected three mineralized zones including 3.4 metres of 5 grams gold, 10.8 metres averaging 7.2 grams gold and a 5-metre section grading 8.3 grams gold. With widths of 3 to 15 metres and a near-vertical dip, the new zone exhibits favourable geometry for mining.
San Gold restarted full commercial operations at its Rice Lake mine earlier this year and aims to produce about 60,000 oz. in 2007, ramping up to about 100,000 oz. gold annually in the following years.
The stock reacted favourably to the new high-grade values, closing up a dime at $1.47 per share on volume of 500,000. The shares have traded in a 52-week range of 41-$2.25.
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