Amarillo Gold Corp. told investors that recent drilling results had confimed good continuity and depth potential at its Pastinho gold deposit, which augurs well for any mine at the firm's Mara Rosa project in Brazil.
Pastinho is Amarillo’s second primary gold deposit at the project in Goiás State and lies 3.5 kilometres (km) northeast of the flagship Posse gold deposit along the Posse north gold trend.
"We expect Pastinho to develop into another source of future ore feed for the Posse mill once the Posse Gold Mine is built," said Mike Mutchler, Amarillo’s CEO, in a statement.
"We believe Pastinho will eventually not only extend Posse’s overall mine life, but significantly increase its average annual gold production as well."
READ: Amarillo Gold discovers new primary gold deposit on its Mara Rosa property in Brazil
The latest drill results come from nine holes, or 1,564 metres (m), of the 4,000m originally budgeted for the 2021 exploration program at Mara Rosa, and are on top of the positive assay results from 15 holes released in September, after which Amarillo expanded its diamond drill program by 3,000m.
Highlight assays included 11 metres (m) at a grade of 1.20 grams per ton (g/t) gold from 222m, which included an intersection of 7m at 1.81 g/t gold from 220m.
This results extends Pastinho to a vertical depth of around 200m, said the firm.
The deposit is interpreted to be a mesothermal orogenic gold deposit and it has now been defined over 1,700m of strike length to depths of 200 metres and widths of up to 20m. Significantly, it remains open.
Two drills are currently operating, and further updates will be provided when results are received, said Amarillo.
Research Capital repeats 'Speculative Buy'
Following the news, Research Capital Corp repeated a 'Speculative Buy' and C$1.10 price target on the Amarillo stock.
Analysts noted that the mineralization at Postinho, which was added to the Mara Rosa project in December 2019, was now "twice as deep and still open in all directions".
"Apparent widths range from 50-20m, spread over the noted 1.7km of strike and now down to at least 200m vertically below surface. Mineralization remains open in all directions," they said.
"For context, the main Posse deposit, located 3.5km to the southwest, hosts Proven and Probable Reserves of 23.8Mt grading 1.18 gpt Au, sufficient to support planned production rates for nearly 10 years. AGC expects the new discovery to support an increase in those throughput rates or an extension to the mine life," said analysts.
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