And With One Hole, Mexican Gold (CVE:MEX, FRA:4QW1) Shows Multi-Million Ounce Potential

Palisade Research May 16, 2017
Category: Research

Mexican Gold (CVE:MEX, FRA:4QW1) is currently preparing its maiden resource and our internal estimate pegs it to be between 750,000 and 1.0 million ounces of gold equivalent.

Yesterday, Mexican Gold announced the result from its sole step-out drill hole, LM-17-CS-04, and we consider it to be the biggest news the company has put out since the discovery of the El Dorado Deposit.

Mexican Gold’s current drill program has primarily been dedicated to in-fill the El Dorado-Juan Bran Zone to complete a maiden resource, slated for late June and early July.

However, Mexican Gold dedicated one hole from the program as a step-out in a totally new area, to test the geological concept at the Cinco Senores historical mining area. Cinco Senores is littered with old workings, including large underground openings.

The hole hit in a big way, intersecting a high-grade two-metre interval with massive chalcopyrite grading 10.8 g/t gold, 41.7 g/t silver and 2.8% copper, or 15.98 g/t gold equivalent.

LM-17-CS-04 was actually a follow-up to three holes drilled back in 2011, headlined by 1.69 g/t AuEq over 22.0 meters. At the time, the results were fairly lackluster, but still warranted further investigation. MEX was finally able to follow-up, drilling a step-out 100 meters to the west of previous drilling:

This drill hole, combined with the 2011 drilling and sampling program, indicates that Cinco Senores has the potential to be another El Dorado/Juan Bran-type zone.

To put this in layman’s terms, imagine a blanket of gold running across a large swathe of land called sill. Over millions of years, valleys were cut and the sill was eroded away where exposed, however, this precious blanket still remains where it is covered by mountains and rock. The remnants of this sill can be seen as ‘outcrop’, depicted by the redline in the above map. These are areas where ‘valleys meet mountain’.

In one valley, drilling deeper and into the side of the mountain, the El Dorado Zone was delineated, however, there was another valley laying 670 meters to the west.

Brian Robertson, Chairman & CEO, along with his geological team, had a strong inkling the sill extended. This step-out confirmed that the blanket actually extended across valley and mountain, and validates that Las Minas is littered with El Dorado-like deposits.

We feel this increases the amount of gold potential at Las Minas from a million ounces to multi-million ounces. Nevertheless, there will need to be a lot of drilling to see what is truly going on.

First things first, we reiterate that Mexican Gold’s maiden resource will be a barn burner. If Cinco Senores can replicate even half of El Dorado/Juan Bran’s potential, Mexican Gold will be the best performing gold explorer of 2017.

To read more about Mexican Gold, please see our original write-up.  We are expecting the rest of the assays from Mexican Gold’s drilling campaign any day now. The initial results looked great, and we fully expect drilling to confirm the existing deposit, and expand it even more.

 

Palisade Global Investments Limited holds shares of Mexican Gold. In fact, after the current private placement closes, we will own 17% of the company. We receive either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate. The information contained in such write-ups is not intended as individual investment advice and is not designed to meet your personal financial situation. Information contained in this report is obtained from sources we believe to be reliable, but its accuracy cannot be guaranteed. The opinions expressed in this report are those of Palisade Global Investments and are subject to change without notice. The information in this report may become outdated and there is no obligation to update any such information. Do your own due diligence.

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