By James West
Wednesday, August 5, 2009
Major new discoveries are few and far between these days especially when it comes to new gold deposits. That didn’t stop Corex Gold (TSX.V:CGE) from intersecting a stellar 91.4 metres grading 1.05 grams per tonne gold. Although not exceptionally high grade, the long widths of the mineralization leaves the door wide open for potential intersections of higher grade feeder systems often present in low grade disseminated epithermal systems. Most importantly, mineralization is found from as close to 1.5 meters from surface. Although grade is low, these style systems in Mexico lend themselves to economic cut-off @ 0.3 grams per tonne gold. (1 g/t is a highly economic grade.)
But the best news is that the company will follow up these excellent results with a drill program to commence on August 15th that will drill offsets from the existing collars in an effort to replicate the long hits of hoe SR08-05, as well as selected step-out targets designed to enhance the known mineralized area.
Craig Schneider, president of Corex, said, â€œWe are very pleased and excited about developments at the Santana project. While we knew we had quality property prospective for gold, we were pleasantly surprised by the apparent scope of the mineralization. The upcoming drill program could really put Corex into the relatively small category of companies drilling potentially major gold deposits.â€
This new discovery results from a drill program conducted in January 2009, and in assay results subsequent to the initial results released then. The Santana Project is a 7,722 hectare claim block located in the Sierra Madre Occidental mountain range, host to numerous gold, silver and base metals mineralized zones.
But the new assays were eye-openers for the company, resulting in Corex striking a deal with Virgin Metal’s Mexican subsidiary to option the 722 hectare Hilda Concessions, which lie directly to the north and contiguous to the Santana Project area. The mineralized structural corridor identified on Corex’s Santana property is believed to extend onto the Hilda Concessions.
Preliminary work on the project by Corex has outlined an approximately 2 km by 2 km zone of strong, low sulfidation alteration, within which 10 gold and silver mineralized zones have been identified. The latter includes widespread gold-silver bearing sheeted quartz veining and a brecciated zone at La Turena.â€ Assay values of up to 11.65 grams per tonne gold and up to 457.6 g/t Ag were recorded in samples taken from the property by Corex, confirming the previous results obtained by Resource Geosciences de Mexico Sa de CV.
According to management, considerable potential exists for further discovery at depth at the â€œTurenaâ€, â€œBenjaminâ€ and â€œSanta Luciaâ€ zones as Phase 1 drilling only tested the targets to a depth from surface of approximately 75m and holes SR08-02, -05, -06, -07 and -08 ended in mineralization.
Following are the assay results from the expanded program:
La Turena Zone
Drill Hole # SR08-04: 48.7 meters of 0.99 grams per tonne gold from 3.1 meters in depth
Drill Hole # SR08-05: 91.5 meters of 1.05 grams per tonne gold from 1.5 meters in depth
Drill Hole # SR08-06: 59.5 meters of 1.23 grams per tonne gold from 19.8 meters in depth
Drill Hole # SR08-08: 61.0 meters of 0.7 grams per tonne gold from 1.5 meters in depth
Drill Hole # SR08-09 : 10.7 meters of 1.38 grams per tonne gold from 12.2 meters in depth & 19.8 meters of 0.48 grams per tonne gold from 48.8 meters in depth
Drill Hole # SR08-14: 27.4m of 1.18 grams per tonne gold from 12.2 meters in depth
Drill Hole # SR08-13: 10.8m of 1.52 grams per tonne gold from 54.7 meters in depth
Santa Lucia Zone
Drill Hole # SR08-15: 13.7 meters of 2.98 grams per tonne gold from 48.8 meters in depth Including: 1.5 meters of 16.71 grams per tonne gold from 51.8 meters in depth
Drill Hole # SR08-16: 9.2 meters of 0.66 grams per tonne gold from 9.1meters in depth
The proximity of the mineralized zone to surface means development of extraction operations will likely take the form of and open pit/heap leach mine. Heap leach mining is common in Sonora state gold mines because of the prevalence of oxidized mineralization in the region. Gold mines in Sonora state with heap leach operations include:
Newmont Mining (NYSE:NEM) 120,000 oz Au per year producing Herradura Mine
Alamos Gold’s (TSX:AGI) 150,000 oz Au per year producing Mulatos Mine
Capital Gold’s (OTCBB: CGLD, TSX:CGC) 40,000 oz Au per year producing El Chanate Mine
Yamana Gold’s (NYSE:AUY, TSX:YRI, LSE:YAU) 120,00o oz eq. Au per year development stage Mercedes Mine
The Phase 2 drill program Corex plans to carry out commences August 15th of this year. This program will test for continuity of surface mineralization through mapping, mechanized trenching sampling between known mineralized zones.
There will also be drilling of untested targets down dip and along strike of the zone extensions discovered during Phase 1 drilling. The second phase program will drill a total of 3,000 meters.
Corex is trading in the CA$0.40 range as of this writing. With 26 million shares issued, that gives the company a valuation of CA$10.0 million. Although the intercepts themselves don’t confirm the existence of an economically viable mineral deposit, the long intercepts and proximity to surface establish the foundation for such a deposit. It’s not going to take a great deal of additional success at the drill bit to confirm a major discovery.
With the company trading at such a low valuation, risk tolerant investment portfolios would do well to contain shares in Corex Gold. One more long drill intercept like the last one, and these prices could easily be left behind forever.
Learn more about Corex Gold by visiting the company’s web site at Corex Gold Corporation – Home Page – Wed Aug 5, 2009.