by Stockwatch Business Reporter
New York spot gold recovered $12.40 Monday, ending the day at $1,745.10. The TSX Venture Exchange dropped 8.4 points, closing at 933.31 while the TSX gold index added 3.77 points to 300.96. Most Canadian gold miners moved higher with bullion today. New Gold Inc. (NGD), which bucked yesterday's downdraft, was weaker today, dropping two cents to $2.27 on 6.05 million shares. Alamos Gold Inc. (AGI), weak yesterday, rebounded smartly today, adding 51 cents to $10.62 on 1.7 million shares today.
The hits keep coming for John Burzynski's Osisko Mining Inc. (OSK). Osisko zigzagged its way from $1.60 in 2018 to near the $5 mark last summer on the strength of a surging gold price. It has been in retreat since then as bullion retreats from its $2,060-an-ounce high, despite a steady flow of high-grade glitter coming from the company's never-ending drill program at Windfall Lake in the Abitibi district of Quebec. The downward trend reversed today, as Osisko added three cents to $3.05 on 1.71 million shares on word that it has drilled a 2.2-metre interval averaging 877 grams of gold per tonne.
That bonanza-grade encounter occurred within a deposit already defined by a resource estimate, but the company also scored several promotable hits through expansion drilling. A two-metre interval returned 85 grams of gold per tonne, aided by a 0.4-metre stretch that averaged 425 grams per tonne. Mr. Burzynski, chief executive officer, was suitably pleased with the latest numbers. "All zones at Windfall continue to expand and infill nicely," he cheered, adding that the new results highlight the potential to increase the strong base-case economics derived in a recent preliminary economic assessment.
That dream sheet, barely a week old and already promoted as potentially behind the times, was based on a resource of six million tonnes measured and indicated at 9.6 grams of gold per tonne and a further 16.4 million tonnes inferred at eight grams per tonne. All told, Windfall held 6.1 million ounces of gold, with over 2.6 million ounces of silver present as well. The study proposed a 3,100-tonne-per-day underground mine that would cost $543-million to build that would run for 18 years, averaging over 300,000 ounces of gold per year in its first seven years.
There was far less cause for celebration at Peter Hawley's Fabled Silver Gold Corp. (FCO), which lost two cents to 16 cents on 2.2 million shares on word that it has drilled a 1.1-metre interval averaging 75.9 grams of silver per tonne at its Santa Maria project in Parral, Mexico. This was the last interval sampled in the hole, but Mr. Hawley, president and CEO, hastened to add that the same rock unit continues to the end of the hole, an additional 6.4 metres. (Even so, investors were unimpressed with a narrow lower-grade hit at a downhole depth of over 225 metres.)
Mr. Hawley was clearly enthused, at least from a promoter's perspective. He said the rest of the rock from the latest hole is now being sampled on a rush basis. As well, once the drill rig completes a new hole elsewhere, it will be brought back to reopen the hole and drill deeper, until the "structure has clearly been exited." This will not be the first time that the hole, the eighth of the latest program, has been reopened. Drilling had been terminated prematurely last fall because of rock conditions, so Fabled resumed drilling with larger equipment.
There was nothing fabled about the company's stock chart from when it launched late last year until it left its 10-cent perch in late January, crawling as high as 40 cents in early February as the initial results from Santa Maria trickled in. The first hole of the program produced 0.18 gram of gold and 44 grams of silver per tonne over a hefty 68.6 metres, aided by a 20-metre interval that returned 0.35 gram of gold and 106 grams of silver per tonne.
The width was less impressive with the second hole, but the grades raised an eyebrow or two, with 0.9 gram of gold and 561 grams of silver per tonne over 3.3 metres. Unfortunately, it appears that Fabled led with its best foot, as the assays have been less promotable since then. Late in February, the third hole produced 0.49 gram of gold and just 85 grams of silver over 12.5 metres and in mid-March, the best that another two holes could muster was 0.57 gram of gold and 203 grams of silver per tonne over 2.2 metres.
With subsequent assays being increasingly difficult to promote, Mr. Hawley has turned his attention to what he calls "blue sky drill targets" at Santa Maria. Fabled, he says, is exploring areas never previously touched, "with new ideas to test our structure-on-structure theory" across the property. There is a new anomaly, he enthuses, running 700 metres along an east-to-west trend with intriguing veins running north to south. Here, Mr. Hawley says, Fabled is "systematically taking" -- working slowly at -- what he thinks is a simple structure to develop a new concept.