Wednesday 16 June 2010

Patagonia Gold reports high gold-silver grades from Cap-Oeste and COSE, identifies new shoot

Patagonia Gold (LON:PGD) released the latest results from drilling at its Cap-Oeste and COSE gold-silver projects in Argentina, reporting gold grades of up to 26.07 g/t (grammes per tonne) and up to 17.63 g/t gold, respectively  and a new potential shoot now called the Cap-Oeste extension.

The new shoot was identified by drilling along strike between the Main shoot and COSE, both of which Patagonia said remained open at depth. Step out drilling on 100 metre centres has been conducted over one kilometre of strike to the south east of Cape Oeste resource area along the chargeability anomaly towards the COSE project. Follow-up drilling has returned intersections of 8 metres at 1.2 g/t gold and 28 g/t silver in oxidised breccia, which is considers significant for possible Cap-Oeste style shoot development at depth in less oxidised rock.

The results from drilling at Cap-Oeste included intersections of 2.75 metres grading 4 g/t gold and 93 g/t silver, 5.55 metres grading 3.96 g/t gold and 22 g/t silver, 7.7 metres grading 26.07 g/t gold and 1,322 g/t silver including 0.95 metres at 96.6 g/t gold and 8,152 g/t silver and 5 metes at 4.17 g/t gold and 108 g/t silver.

At COSE, drilling intersected intervals of 5 metres at 17.63 g/t gold and 335 g/t silver including 2 metres at 36.25 g/t gold and 689 g/t silver, 2.8 metres at 18.37 g/t gold and 267 g/t silver, 3.12 metres at 16.92 g/t gold and 237 g/t silver including 1.6 metres at 27.03 g/t gold and 410 g/t silver, 2.1 metres at 13.02 g/t gold and 601 g/t silver, 4.5 metres at 4.29 g/t gold and 41 g/t silver, 0.81 metres at 5.4 g/t gold and 3,210 g/t silver and 2.1 metres at 18.07 g/t gold and 619 g/t silver including 0.5 metres grading 72.5 g/t gold and 1,449 g/t silver.

A drilling campaign commenced on the COSE prospect in October 2009, focusing on extending the shoot, down plunge and up plunge from extremely high grade intersections including 4.1 metres at 561.6 g/t gold and 28,523 g/t silver and 13.93 metres at 159.23 g/t gold and 627 g/t silver. Exploration to the south of COSE, including detailed mapping, sampling and trenching has identified a potential similar structural setting to the COSE breccia at surface, results of channel sampling are pending.

Cap-Oeste extension will be targeted by next season’s drilling campaign that is scheduled to commence in September 2010, also covering  other potential Cap-Oeste style shoots identified so far by the exploration teams along the highly prospective Bonanza fault, including La Pampa as well as three shoots in the Cap-Oeste resource area and south east of COSE.

In October 2009, Patagonia reported an updated resource estimate on the Cap-Oeste gold and silver project showing a combined resource of 655,932 oz (ounces) of gold equivalent with 88% in the indicated category. A scoping study to investigate both open pit and underground mining methods together with various processing operations, including heap leach, was initiated in February 2010 for completion in Q4 2010. The further 8 holes were drilled on the main shoot and three other shoots within the resource area to confirm their down dip continuity.

The El Tranquilo property block, covering over 60 square kilometres, contains the Cap-Oeste deposit, the COSE prospect as well as the Vetas Norte and Breccia Valentina structural trends. The property is located approximately 120km to the south east of the Lomada de Leiva gold project where development of a heap leach operation is currently in progress.

http://www.proactiveinvestors.co.uk/companies/news/17727/patagonia-gold-reports-high-gold-silver-grades-from-cap-oeste-and-cose-identifies-new-shoot-17727.html

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