Exterra Resources (ASX: EXC) is so close to an upgraded Resource at its Linden Gold Project with a nine hole, 2,900 metre drilling program due to be completed this week and results to support the upgrade.
High grades of up to 19.2 grams per tonne (g/t) gold have been returned from the fifth, sixth and seventh holes drilled at the Second Fortune mine.
Highlighting the progress being made at Linden, Exterra is nearing a Resource upgrade within weeks, ahead of the start of a Feasibility Study into the development of the Second Fortune mine which is scheduled for completion in the September 2012 quarter.
Recent notable intersections include 0.57 metres at 19.2g/t gold, 0.56 metres at 18.9g/t gold, 0.48 metres at 16.1g/t gold, 0.3 metres at 15g/t gold and 0.66 metres at 9.05g/t gold.
These latest results continue to confirm the high grade nature of the Second Fortune mine, building on earlier intersections which include a bonanza gold hit of 0.3 metres at 65.1g/t.
Further exploration potential is evident in the continuation of mineralisation at depth.
The Hanging-wall and Footwall Lodes had been intersected in the upper portions of the deposit, however these lodes appear to also continue at depth and have the potential to increase the ounces per vertical metre.
Importantly, Exterra has also identified the presence of multiple, parallel lodes in addition to the main lode that was the primary objective of the current drilling program, and the lode that the current JORC resource is based upon.
Exterra is testing the continuity of the high grade lode system below and along strike of the deepest drilling completed to date at around 250 metres.
Holes in the current drilling program will test the lode system to 300 metres. Worth noting here is that there have been no holes drilled at these sorts of levels since about 1985.
A diamond drilling program completed by Exterra last year confirmed the high grade nature of the Second Fortune lode system.
That program delivered a maiden Inferred JORC Resource of 207,000 tonnes at 7.9g/t for 52,270 ounces of gold for the mine.
A mining lease has been granted over the Linden Project, which contains established infrastructure from the historic operation.
The project has near-term development potential with toll treatment options.
Surrounding the historical Devon gold mine, these three tenements contain 2.3 kilometres of north and south extensions of the magnetic structures that host the Devon mine.
Devon produced 6,800 ounces of gold at 19.6% gold between 1911 and 1927.
Last year Exterra increased its holding at Linden with the acquisition of a 100% interest in an exploration licence contiguous with the existing tenements.
Exterra has a market cap. of just A$3m and an enterprise value of around $1.3 million, yet has exposure to four high grade gold projects within the highly prospective Archaean Yilgarn Craton
The Yilgarn Craton is a world class gold province which has been a prolific producer of gold since the late 1880s and includes the Kalgoorlie "Golden Mile" deposit which has produced over 50 million ounces of gold since discovery in 1893.
Given the strategic location of the company's projects, and the exploration upside possible at Linden from the continuity of the main lode system at depth below the current 52,000 ounce Resource, Exterra looks to be undervalued.
Proactive Investors is a market leader in the investment news space, providing ASX "Small and Mid-cap" company news, research reports, StockTube videos and One2One Investor Forums.