U.S. Gold Corp. (NASDAQ:USAU) is picking up attention at the start of this week on news that the company has just announced (and released) the results from an end of 2017 drilling effort at one of its lead North American projects.
Here's what the announcement covers and what it means for the company going forward.
For anyone new to US Gold, the company is a gold and natural resources exploration company that's headquartered in Nevada and has two primary projects in development – one called Keystone, which is located along the Cortez trend in the just mentioned Nevada and another called Copper King, which is located in Southeast Wyoming.
US Gold's leadership team includes Dave Mathewson as Vice President of Exploration, who led the discovery and development of some of Newmont Mining Corporation's (NYSE:NEM) top deposits throughout the last two decades and also founded and built Gold Standard Ventures Corp. (TO:GSV).
Anyway, let's get to the latest news.
As mentioned, it relates to some fresh drilling results from the company's Copper King project, which, again as mentioned above, is the project that's located in Southeast Wyoming.
This project came with a completed Preliminary Economic Assessment when US Gold acquired it, which was completed by Mine Development Associates back in 2012. The latest drilling program is an attempt to build on this PEA, which was updated (again by Mine Development Associates) at the end of last year.
Before jumping into the most recent results, it's worth touching on the outcome of the updated PEA – it resulted in the current known deposit showing a Net Present Value (NPV) for the project of $178.5 million at $1,275 per ounce gold price and $2.80 per lb. copper price.
So, the latest drilling results derive from a four-hole, reverse circulation drilling program with a 3,945 feet/1,202-meter total drill depth. It was designed to provide what's called a "first-pass drill test" of anomalies obtained from a ground magnetics survey that the company carried out in June last year and combined with an induced polarization (IP) survey conducted that was completed by another entity, Zonge Geosciences, in October 2017.
The program included four holes but it's one of these holes that's really grabbed the attention of markets. The hole is called CK17-01rc and it was a 1,030 feet deep hole located around 200 meters from the existing deposit, which is the deposit covered by the existing and recently updated PEA.
As per the results, hole CK17-01rc encountered a composite of almost 700 feet of base and precious metal mineralization beginning almost at the surface, with gold, silver copper and zinc all encountered at between 20-85 feet. Mineralization of all four continues right down to the 940-1025 feet bracket, pointing to the fact that this is the strongest anomaly obtained by the above mentioned IP survey on the property. Further, and just as interestingly from a market response perspective, this is an anomaly that had not previously been specifically tested by drilling and that, as a result, had essentially escaped detection on the back of all previous activity at the site.
The company believes that the new discovery zone could extend further west and, if this proves true, could add additional potential upside to the known deposit and could necessitate a further updating of the PEA that's in place at Copper King.