Minera IRL (LON:MIRL) has revealed positive underground drilling results from the Ollachea project in Peru.
Each of the three completed holes encountered potentially ore grade gold mineralisation, the company said.
The results include a 20 metre intersection grading 4.48 grams per tonne (g/t), 11 metres at 5.47 g/t and 9 metres at 5.45 g/t.
They also confirm a significant strike length, as the easternmost hole was drilled 320 metres from the limits of the Minapampa resource, on which a successful feasibility study was completed last year.
"We are very pleased with the results of the drilling programme from the underground exploration drive." said Courtney Chamberlain, executive chairman of Minera IRL.
"The drilling, carried out by Ingetrol Peru S.A.C., confirms a substantial strike extent of potentially economic grade gold mineralization which has evolved eastwards into a single, wide lens.
“Moreover, this is located between the Minapampa Zone, where over 1 million ounces has been scheduled for mining in the feasibility study completed in 2012, and the future plant site.
“This has potentially important ramifications due to the ability to access ore from wide, large tonnage stopes close to the plant. Having confirmed continuity to the east, we have reluctantly suspended the drilling programme to focus on permitting and development related work."
City broker RFC Ambrian says the results are very encouraging.
“Grades are higher and geology is consistent with the current deposit that hosts a 2.6Moz resource (including a 1Moz reserve at 3.4g/t),” the broker said in a note.
“The strike has been extended by over 320m east of the existing ore body; if drilled out, this strike extension would likely supply the initial ore as it lies closest to the planned access drive and future process plant site.”