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Medgold Resources excited by potential of Serbia project ahead of drilling

Medgold has earmarked drilling to start at the Tlamino project in Serbia in August

Gold explorer Medgold Resources Corp (CVE:MED) is looking at a busy and exciting summer, as it pushes ahead with drilling and thereby potentially de-risking the Tlamino project in Serbia.

It has lined up a contractor, is going through final hurdles, and a 2,500 metre drill program is earmarked to start at the end of this summer initially to test high grade areas it has identified.

The property includes two historical showings - Liska and Barje - and the IP survey work identified an anomaly which extends to the west of the Barje outcrop for over 1km, which will also be drill tested.

Channel sampling has also thrown up high grades, for example an overall intersection of 84 metres (m) at 5.6 g/t gold at Barje.

Dan James, the president at Medgold recently told Proactive: "I haven't seen many projects around with grade like that, siting at surface. You can't walk away."

WATCH - Medgold boss on 'tantalising' potential at Tlamino after encouraging results

What assets does Medgold Resources have?

The Europe-focused group is partnered with Centerra in Portugal, which fully funds its work, and in Serbia, it has struck a strategic alliance with Fortuna Silver Mines Inc.

The main project in Portugal was Boticas but after several years, and having not discovered a 1mln ounce target, the firm has stepped back efforts in the country to focused wholly on Serbia.

There, Fortuna, which has a 24% stake in Medgold and it's the largest shareholder,  has chosen  Tlamino as the first project to option.

Essentially, the deal sees Fortuna financing exploration on a select small portfolio of projects and then electing or not to progress further with whatever looks good in a formal joint venture

It can earn up to 70% of two chosen projects by spending $8mln on exploration and completing a preliminary economic assessment (PEA).

Registering interest in many licences.

Notably, Medgold already has six licences granted in Serbia and had registered interest in around 20 more, so  it really has hit the ground aggressively in the country, which is currently enjoying a  new wave of mining industry interest.

Capital Network's mining analyst Sam Catalano says he likes the fact that Medgold has joined with a larger partner across its Serbian asset base to ensure it’s a ‘well-funded exploration vehicle’.

"As a broad comment, this can provide potential Medgold investors with some comfort that they will not be asked to contribute meaningful equity to support exploration efforts.

"The flip-side is that to some extent investors upside in the main projects is capped (typically at ~30% of asset value), however, in a time of low equity prices in the sector, and general difficulty for early stage exploration funding, we believe this shows good savvy from the management team to push their efforts forward."

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Medgold Resources Corp Timeline

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