GOLD STOCKS NEWS - Gold stocks were mostly higher on the day in spite of the weaker gold price, while one mid-cap gold stock released exceptionally high-grade drill results. Canadian-based gold mining producer, San Gold (SGR.TSXV) - which has drawn several comparisons to Goldcorp (GG) - released results from underground exploration drilling at its Rice Lake gold mine in SE Manitoba, Canada. Drill hole #28-10-53 assayed 121 grams per tonne (g/t) (3.53 ounces per ton) of gold over 13.3 meters (44 feet) including an extremely high grade width of 319 g/t (9.30 ounces per ton) of gold over 4.9 meters (15.9 feet) containing coarse visible gold. Goldcorp’s Red Lake Deposit developed in a similar way during the 1990’s, consistently discovering high-grade gold veins in much the same way as San Gold’s camp continues to grow.
These results are the latest in a series of positive developments that have made shares of San Gold one of the top performers of the gold stocks sector over the past year, with an 85% rise over the past 52 weeks - compared to a 48% increase in shares of Goldcorp. Investors have sought out many small- and mid-cap gold stocks, such as San Gold, in order to gain enhanced leverage to the price of gold that is often not available from large-cap gold stocks such as Goldcorp.
Another significant intercept that was reported was drill hole #28-10-80, which encountered five individual mineralized zones within a wider mineralized section of 50 meters (164 feet) grading 4.8 g/t (0.14ounces per ton) of gold. The latest results followed up on the discovery of multiple new zones beyond the eastern extremities of the Rice Lake mine announced on January 25 and March 31, 2010. The Canadian-based gold explorer went on to say that these zones, known collectively as RL East, display noteworthy widths as well as grade and are hosted within structures that trend upwards toward the high grade 007 zone near surface.
Commenting on the results, San Gold’s CEO - Dale Ginn - stated that “San Gold mine geologists have produced one of the most impressive intersections ever within Rice Lake. Taking into account that this is exploration drilling outside of known Rice Lake mine extents, these results are truly remarkable. The mining team’s efforts are demonstrating that this mineralized system is linked to our new surface zones and that our geological model produces results at depth as well as near surface. We look forward to closing this gap and taking a broader approach to a mineralized system that is fast becoming much larger than a collection of individual deposits.”
While gold stocks were largely unchanged on the day, San Gold’s share price - after being halted - surged as much as 8.3% to C$3.80 this afternoon on the back of the positive drill results.
