Shares in Otis Gold Corp. (CVE:OOO)(OTCQX:OGLDF) flew higher on Thursday after the company revealed results from its fall drill program at the Kilgore gold deposit in Idaho, saying there is significant potential to expand the property in the near term.
The company said the fall drill program in 2012 at Kilgore found several bulk-tonnage intercepts in excess of 80 metres thick.
Otis shares gained more than 13% this morning, to trade at 16.5 cents.
"These holes are located beyond the northern edge of our 820,000 ounce Kilgore Deposit," CEO Craig Lindsay told Proactive Investors today.
"Beyond these holes and to the north of the deposit we have identified over 400 meters of open-ended gold in soil anomalies. The potential to significantly expand the Kilgore Deposit in the near term is high."
Notable results from the drilling included 82.3 metres of 0.95 grams per tonne (g/t) gold in hole 12 OKR-291, and 121.9 metres of 1.04 g/t gold in hole 12 OKR-292, which includes 45.7 metres of 1.52 g/t gold.
Further, hole 12 OKR-294 returned 83.8 metres of 1.12 g/t gold, including 30.5 metres of 2.10 g/t gold.
The fall drilling campaign totalled 1,009 metres in 6 reverse circulation holes designed to extend and offset the 100-metre-plus thick, near-surface intercepts found in core holes drilled into the North target area in 2011. Four of the six holes found "significant bulk-tonnage thicknesses and gold grades", the company said.
"The thickness of these bulk-tonnage intercepts in the Kilgore Deposit's North Target area serve to further enhance the overall deposit's size and potential mineability," Lindsay added in a statement.
"The intercepts, all of which are currently open-ended to the northwest and presently define the northwestern boundary of the deposit, will be offset in 2013 as Otis continues to drill out the deposit and move Kilgore toward a production decision."
Indeed, the company is planning to complete additional drilling of the open-ended mineralization reported today in 2013.
Otis said that the new intercepts, along with its original 2011 North target area discovery intercepts, are the "thickest, some of the shallowest, and some of the highest-grade bulk tonnage hits" drilled by the company at Kilgore since acquiring the property in 2008.
The deposit now contains an indicated resource of 520,000 ounces gold in 27.35 million tonnes at a grade of 0.59 grams per tonne (g/t) gold, and has an inferred resource of 300,000 ounces gold in 20.23 million tonnes at a grade of 0.46 g/t gold.
The news today follows Otis' announcement last week that it inked a joint venture deal for its Oakley project in Idaho with Lateral Gold Corp (CVE:LTG), giving Otis both cash and a significant potential shareholding in Lateral as the company moves forward with development at its main Kilgore property.
"The Oakley project has been in our portfolio for the past five years, and we haven't had the resources from a capital or manpower perspective to advance the project, as we have been dedicating our time to the Kilgore project,” Lindsay told Proactive Investors last week.
The letter of intent agreement allows for Lateral to earn up to an initial 70 per cent stake in Oakley, which is a classic epithermal hot spring-type gold project.