Homestake Resource Corp. (CVE:HSR) Wednesday reported that high-grade gold assays were returned from three of five Phase I drill holes at the South Reef deposit on the Homestake Ridge project, located in British Columbia.
The company also said that Phase II drilling, which is funded by Agnico Eagle Mines (TSE:AEM), has commenced. South Reef is located approximately 800 metres to the southwest of, and on a parallel mineralized trend to, the project's current resource inventory at the Main Homestake deposit and the Homestake Silver deposit.
At South Reef, five drill holes, totaling 1,248 metres, were completed as part of the initial phase of drilling in 2012.
Highlights include a 4.0 metre interval averaging 11.4 grams per tonne (g/t) gold and 3.7 g/t silver from drill hole HR12-243; and a 2.9 metre interval averaging 5.89 g/t gold and 2.0 g/t silver which includes a 0.5 metre interval averaging 16.3 g/t gold and 4.54 g/t silver from drill hole HR12-240.
Homestake said that the new holes offset three holes drilled in 2011 that tested a 75 metre strike-length of the South Reef deposit and returned high-grade gold from all three holes, including a 3.1 metre interval averaging 30.8 g/t gold and 3.3 g/t silver within an 8.7 metre interval averaging 11.3 g/t gold and 1.6 g/t silver from drill hole HR11-232.
Drilling in 2012 has increased the strike length of the high-grade mineralized zone by approximately 100 per cent which remains open in all directions. Gold mineralization is variably associated with strong quartz-chlorite alteration, pyrite and minor base metal sulphides interspersed with intervals of sericite + pyrite alteration. Assays for two holes are pending.
Phase II drilling has commenced with a 6 to 8 drill hole, $1.8 million exploration program, being funded by Agnico-Eagle under a recently signed option agreement. The program will test a 600-metre strike length of the South Reef trend, including several hangingwall and geophysical targets.
Drilling is anticipated to continue into mid-October.
The combined Phase I and Phase II budgets total $2.5 million for 2012. Agnico-Eagle can spend an additional $8.5 million by December 31, 2014 to earn a 51 per cent interest in the Homestake Ridge Project and a total of $25.3 million by 2016 to earn 65 per cent of the project. Homestake will remain as operator for the 2012 season.
Target definition and compilation for the Kinskuch project continues in preparation for surface exploration on this 623 square kilometre property, which is located directly east of Homestake Ridge and extends south approximately 30 km to tidewater at Alice Arm/Kitsault.
Exploration will focus on both historical showings and numerous geophysical anomalies identified by the 2011 airborne geophysical survey over the property, with the goal of developing new targets for drill testing in 2013.
Initial work will follow-up encouraging 2011 results along a 2.5 km strike of the Illiance trend and will continue the systematic surface evaluation of the numerous epithermal vein and massive sulphide showings on the trend both to the north and south, a cumulative 14 km of strike length.
Extremely encouraging results in the 2011 drilling included KN11-02 that intersected several mineralized zones with the strongest being 2.8 metres of 318 g/t silver, 2.2% lead and 6.5% zinc.
A 500-metre offset of that hole, KN11-03, also encountered multiple intercepts including 3.9 metres of 267 g/t silver, 1.3% lead and 6.5% zinc.
Homestake owns a 100 per cent interest in the Homestake Ridge project, which is located in a prolific mineral belt in northwestern British Columbia.
The project is being advanced as a potential high-grade underground mining operation with a current NI43-101 compliant Indicated Resource, at a 3.0 g/t gold equivalnet cut-off, of 191,000 oz gold and 1,350,000 oz silver plus an Inferred Resource of 530,000 oz gold and 13,470,000 oz silver.
Two deposits have been delineated to date, with a third, South Reef, discovered late in 2011. Multiple exploration targets remain to be tested on the large 2585 hectare property.