Gold and base metals miner ECR Minerals drilled 13 angled diamond drill holes in April and May to an aggregate depth of 1,112 metres (m) at the El Abra prospect in Argentina.
The best overall intersection of the programme on its wholly-owned Sierra de las Minas gold project area in La Rioja Province was the 3.9m down-hole at 11.6 grams per tonne (g/t) gold, including 0.2m at 109.1 g/t gold. Of 13 holes drilled, three holes intersected very high grade gold mineralisation and four more holes intersected mineralisation grading in excess of 1.0 g/t gold.
The firm said the remaining six holes did not intersect significant mineralisation, but did intersect the host structures, reflecting "complexity of vein morphology and structural control on grade distribution".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Get 6 issues free
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Although many of the samples were lower, potentially economic grades were also obtained.
The firm warned that the range of gold grades encountered by drilling and surface geochemical sampling also suggests a nugget effect, something that makes representative sampling a challenge.
"It appears based on work so far that the El Abra vein system has limited size potential, although further exploration is merited," the firm said.
"However, it is envisaged that any producing operation at Sierra de las Minas would combine feed from multiple prospects, either for processing at a plant constructed in the vicinity of the project area or for onward shipment to an existing facility."
The company is now applying to the authorities in La Rioja for permission to test bulk samples from El Abra for processing off site, which would allow confirmation of the metallurgical characteristics of the mineralisation as well as providing information on the continuity of grade in the target areas. The firm is confident that it could achieve high gold recoveries.
ECR is also planning to undertake a prospect wide programme of detailed surface prospecting to determine if the known veins have strike extensions and if any undiscovered veins exist.
In addition, the firm will use the numerous historical shafts, adits (side-shafts) and cross-cuts at El Abra to take samples without the cost of underground development. ECR will extract water from areas of flooding and take samples to gain a better understanding of grade distribution and the structural control, as well as vein architecture and continuity, which it expects to complete during September.
Patrick Harford, Managing Director of ECR Minerals said: "Planning for the next phase of exploration at our El Abra gold prospect is well underway, and we are preparing for work at other prospects controlled by the company such as Maestro Agero.
"The beauty of Sierra de las Minas is that it contains a host of known high grade gold deposits, and while these mostly appear to be of relatively small size, the area may prove very suitable for our proposed strategy of mining multiple deposits and either establishing a central processing plant or sending parcels of material for processing elsewhere.
"We are also alert to possible new opportunities in La Rioja Province and in other parts of Argentina."
The share price initially leapt around eight per cent but steadied to an increase of 3.2% to 0.65p by 09:01.
NR
Zoopla: House prices slows to 1.4% in May as rate of sales at four year high
FCA reveals 'once in a generation' advice changes - what the reforms mean for you
