Capricorn Metals Ltd (ASX: CMM) shares are falling on Tuesday morning.
At the time of writing, the ASX 200 gold stock is down 2.5% to $11.15.
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What's going on with this ASX 200 gold stock?
A pullback in the gold price overnight appears to be overshadowing the release of a strong exploration update from the company's Mt Gibson Gold Project, which highlighted exceptional drilling results from the Lexington underground prospect.
According to the release, the first seven holes from the drilling program have delivered significant high-grade gold intercepts.
These results include standout intersections such as 13.1 metres at 13.93 grams per tonne gold and 28.6 metres at 5.35 grams per tonne gold, pointing to a potentially high-quality underground resource.
Expanding underground potential
Importantly, all the drilling results reported to date sit outside the current resource envelope.
This suggests that the Lexington zone could materially expand the scale of the Mt Gibson project beyond its existing open pit and underground resources.
Management highlights that the mineralisation extends between 85 metres and 365 metres below current resources, confirming the depth potential of the system.
The drilling program has also extended high-grade mineralisation to over 900 metres of strike and more than 500 metres below current reserve pit designs, with the system remaining open in all directions.
Building on Orion South success
The Lexington prospect sits approximately 600 metres north of the Orion South underground deposit, which already hosts a substantial resource.
Together, the two areas now represent a combined 2.1-kilometre strike length of drilled mineralisation.
Encouragingly, the ASX 200 gold stock believes this is only a small portion of a much larger 8-kilometre mineralised trend across the broader Mt Gibson project.
This raises the possibility of a large-scale, long-life underground mining operation developing over time.
The ASX 200 gold stock's executive chair, Mark Clark, described the results as some of the strongest underground intercepts seen at Mt Gibson to date. He said:
The drilling at Lexington has delivered some of the strongest underground intercepts we have seen at Mt Gibson to date. These outstanding results highlight the scale, continuity and high-grade tenor of the system defined between Orion South and Lexington, which is now clearly emerging as a major underground discovery with genuine potential to add a significant long-life, high-margin underground mining operation to the Mt Gibson project.
