Shares in gold exploration company Pacgold Ltd (ASX: PGO) are booming today and have now surged 61% into the green. They're now trading at 79 cents a share.
Investors are responding positively to a company announcement on its Alice River Gold Project in North Queensland before market open today.
Shares spiked from the opening bell and have been riding high every since. Let's take a closer look.
Why is the Pacgold share price charging higher?
Pacgold provided an update on drilling assay results following completion of the diamond (DD) and reverse circulation (RC) drill programme at its Alice River Gold Project, west of Cooktown.
The project consists of 13 tenements, comprised of eight mining leases and five exploration tenements. They cover an area of 377 km.
A total of 39 holes were completed at the site, comprised of 2,007m in the DD programme and 5,018m via RC drilling.
Pacgold has received results for 25 holes, with results pending for the remaining 14 holes, including 7 holes targeting the "newly discovered high-grade gold zone".
New assay results from drilling at the zone that lies below and along strike of the historical open pit have extended the high-grade gold zone reported in late 2021, according to the company's announcement.
The company says that "high-grade intersection in [hole] ARDH026 is drilled 60m below the recent PGO drill intersection of 26m @ 3.6g/t Au from 104m incl. 3m @ 21g/t Au from 126m and shows a strong increase in gold grade and width of mineralisation from surface to a depth of at least 210m".
It also advised that "multiple visible gold occurrences (results pending) [were] intersected in drilling 130m along strike from ARDH026". The company announcement says assay results for a further 7 holes completed into the zone are expected to be received over the next 5 weeks.
Pacgold notes that drilling success to date and "confirmation of [its] mineralisation model unlocks enormous scope on the Project, with significant potential for the system to define a large-scale resource".
The company now believes that the high-grade gold zone could extend over 700m in strike from greater than 100m depth below the surface and remains open in all directions.
Management commentary
Speaking on the announcement, Pacgold Managing Director Tony Schreck said:
This excellent result in drill hole ARDH026 represents a pivotal advance for our Alice River Project, providing compelling indications we have just intersected the top of a large, high-grade gold system only 100m below surface. We have achieved rapid success applying the gold mineralisation model based on the tier-1 Donlin gold deposit in Alaska, which suggested potential higher grades as we transition deeper into the system. Results are pending for an additional 7 drill holes completed over 250m strike, targeting the zone between 100m to 320m below surface. All 7 holes intersected broad zones of alteration and veining associated with the target, including a 1m interval (ARDH027) with strongly disseminated visible gold.
The Pacgold share price has climbed more than 35% this year to date and has rallied 192% in the last 12 months.
