Xtract Resources' (LON:XTR) Chepica gold and copper project continues to show its potential - with the discovery of a new high grade reef system.
The new find in Chile could potentially double the previous company estimates of contained gold in the area and could also increase the life of mine, the firm said.
Investors hailed the news, sending shares up almost 6% to 0.285p.
Last month, the firm started to develop what's called the Colin Mining area at the project to access a reef system 45 metres below the surface previously hit by drilling.
On June 18, Xtract said it estimated this area could contain around 100,000 ounces of the yellow metal and could significantly increase the life of mine.
Now the development has hit a previously unknown reef system, grading 4.2 grams per tonne (g/t) over a 3.5m width. The system is open along strike and depth and requires no additional off reef development and potentially will significantly reduce the company's mining cost in the area.
Xtract chief executive Jan Nelson said: "Whilst we continue to drive development to the main reef system in the Colin mining area, we will now drive two additional prospect development ends on the newly discovered reef system.
"This will impact positively on not only the grade but also the tonnage profile of the mine.
"We will also increase the amount of underground drilling planned to prospect for more reef systems in the area. These results once again demonstrate that the Chepica mine continues to show potential to develop into a significant gold project."