Dios Padre silver property in Mexico. That in itself is good news, but what really got me excited was the fact that the PR was packed with interesting information about Dios Padre’s additional potential.On Monday, NSGold Corporation (NSX – $0.48) issued, what I consider to be, its most important press release so far. The mineral exploration Company announced that it’s starting a phased exploration program at its
NSGold will implement a two-phased exploration program. Phase I will focus on getting a better understanding of the entire Dios Padre property and its potential, while Phase II is a drilling program aimed at determining the geometry and grade of the known mineralized pit and breccia pipe.
Based on historic exploration programs, sampling and historic resource estimates, the Company targets to get a resource estimate of at least 60 million ounces of silver at the primary zone. This estimate excludes the rest of the property. The financial picture looks like this:
|Targeted Ounces of Silver at Primary Zone||60,000,000 oz|
|Current Price of Silver per Ounce||$37.24|
|Current Value of Targeted Silver at Primary Zone||$2,234,400,000|
Unfortunately the historic resource estimates can’t officially be relied upon because they’re pre 43-101. But the good news is that, most likely, only a modest drill program will be required in Phase II to produce a 43-101 compliant inferred mineral resource. The Company expects to have this ready in 4th quarter of this year.
Phase I is a $700,000 program in which the entire property will systematically be mapped. Next to the initial zone, where the historic workings took place, there are a large number of other areas at Dios Padre that the Company’s geologists want to take a good look at. So rock samples will be taken from all over the property, which has never been done on Dios Padre. Also, the known breccia and underground tunnel will be further investigated during Phase I.
Phase I is to start in the coming weeks.
Phase II is a 10,000 metres surface and underground drilling program budgeted at $3 million, which will target the known resource in the Dios Padre breccia. The drilling will be done underneath the old workings to determine the geometry, shape and grade of this mineralized area. Obviously, when the geologists notice anything exceptional in the immediate surrounding of the old workings, they will try to find out what’s there.
Further Potential of Dios Padre
Next to the 60 million ounces silver estimate, there are several other items that make Dios Padre even more valuable.
- First of all, the 60 million ounces of silver don’t include the source for the known mineralization. Remember that the historic workings, on the surface and underground, are part of a breccia pipe, which means that somewhere there has to be a source for the silver on top. Needless, to say that finding the source would take NSGold into another category.
- Several zones on the propertyshow the characteristics commonly associated with a large mineralized system, and are similar to the main Dios Padre breccia. This may indicate that there are more breccia’s in other areas of the property. It’s too soon to tell whether they’re independent or connected with each other, but the above mentioned Phase I should shed some light on this.
And finally, NSGold’s press release also mentioned the assay results from recently taken surface samples from two channels (30 and 35 metres long) in the previously-mined Santa Gertrudis open pit (see table below). The two channels yielded silver values of 103 grams of silver per tonne (3.3 ounces per ton) and 2.08% lead over 35 meters and 178 grams of silver per tonne (5.7 ounces per ton) with 3.3% lead over 30 meters respectively.
What’s very interesting here are the lead values. If I remain conservative and only use a 2.00% lead content per tonne, that makes 44 pounds of lead per tonne. Today, lead is selling around $1.14 per pound, so that means there’s about $50 worth of lead per tonne in those samples. This amount should be enough to take care of the mining and milling costs, making the silver a free bonus! Of course, more work will have to be done to find out if these results are consistent.
|Average Lead Content per Tonne||2.00%|
|Pounds of Lead per Tonne||44|
|Current Price of Lead per Pound||$1.14|
|Current Value of Lead per Tonne||$50.16|
Is NSGold the most undervalued resources stock out there? I don’t know, because I don’t know all of them. Is NSGold undervalued with its current potential and the current price of gold, silver and other commodities? You bet it is! Don’t let this opportunity pass you by to make some serious money.
|Average||178||3.30||30||These values are derived from two continuous channel samples and were taken across strike, in the pit wall; one (lower level) 35 meters and the other (upper level) 30 meters in length. This initial sampling program is part of the study to establish benchmarks for NSGold’s upcoming exploration program.|
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