Los Cerros Ltd (ASX: LCL) shares are flying high today after encouraging news from the company's Quinchia Project. At the time of writing, the Los Cerros share price is trading 7.5% higher at 22 cents.
In an announcement prior to market open this morning, the company advised drill results have found high-grade gold deposits at its Tesorito South key target are significantly more abundant and widespread than previously estimated.
Tesorito South is part of the Qunichia Project's Terorito Prospect. It is located in Columbia and 100% owned by Los Cerros.
Let's look closer at the gold miner's news.
Los Cerros share price strikes gold
Today, the Los Cerros share price is responding well to the news that drill testing on the estimated edges of the company's project has expanded its mineralised zone.
The three drill holes involved found greater amounts of high-grade gold than was expected.
As a result, the company will begin another series of step-out holes to define the boundaries of Tesorito South's near-surface mineralisation. Step out holes allow mining companies to assess the endpoint of a mineralised zone.
The results have meant Los Cerros has remodelled the Tesorito Project's gold envelope to be significantly larger than it was previously thought to be.
Drill hole results
The most southern of the three drill holes (TS-DH17) found gold in the first 232 metres, as was expected. It intercepted the zone of high-grade gold at 72 metres deep.
By finding larger amounts of high-grade gold shallower than expected, the result has expanded the project's envelope of gold mineralisation over 1 gram per tonne further south.
Assay results from the most southerly hole included:
- 35 metres at 1.15g/t Au from surface including 52.3m at 2.10g/t Au from 72 metres.
The other two drill holes were placed on the northern boundary of the assumed gold mineralisation zone. One was further west (TS-DH20) than the other (TS-DH21).
Both northern holes found significant widths of higher-grade gold than was expected. As a result, the project's envelope of higher-grade mineralisation has been extended. It remains open to the northwest, north and northeast.
Assay results from the two northerly drill holes included:
- 228 metres at 0.86g/t Au from surface including 100 metres at 1.22g/t Au from 128 metres in TS-DH20.
- 274 metres at 0.82g/t Au from surface including 74 metres at 1.29g/t Au from 102 metres including 24.45 metres at 2.5g/t Au from 149.5 metres in TS-DH21.
Management commentary
Los Cerros managing director Jason Stirbinskis commented on the company's findings at the Tesorito Project, saying:
The program of holes – TS-DH15, '16, '17, '20, '21 and other more recent holes with results pending, were all intended to define the limits of Tesorito South porphyry mineralisation. However, all assay results thus far have reported significant widths of both lower and higher-grade gold and so the area of interest keeps getting bigger in the directions we've recently tested.
None of the reported holes were designed to test the deeper porphyry mineralisation discovered by hole TS-DH16 nor the Tesorito North porphyry mineralisation. A geological review is underway to optimise drill hole locations at both of these targets.
Los Cerros share price snapshot
Today's news from Los Cerros has proven to be a spring in the step of the company's share price, which has been performing well on the ASX this year.
Currently, the Los Cerros share price is up by 65% year to date. It's also up a whopping 617% over the past 12 months.
Los Cerros has a market capitalisation of around $94 million, with approximately 471 million shares outstanding.
