Sanatana gets a boost from Watershed results

VANCOUVER — Vancouver-based exploration outfit Sanatana Resources (STA-V) enjoyed a share bounce-back following the release of drill results from its joint-venture Watershed gold project 20-km southwest of Gogama, Ontario.

Sanatana fulfilled a first-year option requirement on the property with Toronto-based Trelawney Mining and Exploration (TRR-V) in mid-March, when it issued 1.5 million shares to its joint-venture partner, and completed a US$1 million expenditure requirement.

Watershed is along-strike and across-section from Trelawney’s Coté Lake gold discovery — a porphyry-style gold deposit with an indicated resource totalling 35 million tonnes grading 0.8 grams gold per tonne for 930,000 contained oz. gold.

Sanatana recently completed a nine-hole drill program collared at Watershed’s Clam Lake target, following up on a 2011 field-exploration program that included outcrop stripping, channel sampling, and a geophysical survey.

Results from the drill campaign’s final four holes were released on April 20, and drilling to date has defined a zone of gold mineralization with a lateral extension up to 300-metres-wide in a north-south direction, highlights include: 2.2 metres carrying 11.7 grams gold from 25 metres at hole 12-01; 18 metres carrying 1.25 gram gold from 199 metres at hole 12-02; 26 metres of 3.96 grams gold from 282 metres at hole 12-03; and 21 metres grading 1.1 grams gold from 62 metres at hole 12-04.

“If we have encountered the westernmost extension of Trelawney’s Coté Lake deposit, these results indicate that the deposit likely extends more than five-hundred metres to the west of Trelawney’s hole E11-82 and remains open both along strike and to depth,” commented chief executive officer Peter Miles following the recent drill results, “Gold mineralization has now been delineated right up to the eastern boundary of the mineral claim and likely extends beyond the claim area to the east. It is now considered less likely that this is an isolated mineralized zone.”

Sanatana released results from two earlier-stage holes in March, which returned higher-grades at depths of up to 450 metres, including: 4 metres grading 14.2 grams gold from 160 metres; 1 metre carrying 16.7 grams gold from 252 metres; and 3.9 metres grading 16.2 grams gold from 451 metres.

Under the joint-venture agreement, Sanatana must spend US$5 million in exploration over a three-year period, though the company maintains the right to accelerate the expenditures, and expects to meet those requirements by the end of the year.

Sanatana’s next target is located 1,500 metres west of Clam Lake, where an anomaly was identified during surface work, including a grab sample grading 25 grams gold. The company recently signed a 5,000-metre drilling contract, and is currently moving the rig to the new target.

Sanatana enjoyed a 14% share boost on 6,500 unit trade volumes following the news, closing at 21¢. The company has 64 million shares outstanding, with a fully diluted position totalling 93 million shares and a presstime market capitalization of $18.3 million.