Treasury Metals gains after "significant" near surface drill results from Goliath's C zone in northwestern Ontario

Shares of Treasury Metals (TSE:TML) rose almost 10% Thursday morning after the company reported more near-surface drilling results from the C zone at its Goliath gold project in northwestern Ontario.

The recent results occur near surface, and could represent an increase in the current open pit mine shells and the mineable ounces within them, the company told investors today. 

The C zone results could also potentially reduce the overall waste to ore stripping ratios, especially in the Eastern section of the deposit.  

Shares of the Toronto-based gold explorer rose 5 cents to 59 cents this morning.

Results include 22 metres at 1.4 grams per tonne (g/t) gold from 60 metres depth in hole TL13-306, as well as 20 metres at 1.0 g/t gold from 26 metres in hole TL13-305. 

Treasury also returned 14 metres at 1.3 g/t gold from 114.7 metres depth in re-entry hole TL223-13RE. 

The C zone is located around 30 to 50 metres behind the project's main zone of mineralization, with recent drilling leading to the discovery of "multiple new mineralized areas", the company said, either by extending previous operators' drill hole depths past the project's main zone, or by new drilling. 

The results Thursday represent the first gold intersections that are coming together to form several ore shoots within the project's "sparsely drilled" C zone, it added. 

Drilling will continue to delineate the zone, which covers an area measuring around 1.2 km in strike length, with the program focused mainly on defining near-surface resources. 

Since the program started late last year, the company says it has concluded that certain drill holes done by previous operators need to be extended in length or re-drilled in order to thoroughly test the C zone. 

A preliminary economic assessment from last July considered a 2,500 tonne per day plant and capex of $92 million at the Goliath project. Goliath should produce 80,000 ounces per year at $700/oz cash costs over a 10-year mine life.

The company is working toward a feasibility study on its project this year, with an environmental impact statement expected to be submitted in May.

Currently, the project holds 810,000 ounces at 2.75 g/t gold equivalent in the indicated category, and 900,000 ounces at 1.76 g/t gold in the inferred category.