TD's Daniel Earle on the last NRCanaco Resources Inc. (CAN-V)
Canaco reported a single drill hole, which cut 60m of 1.67 g/t gold in 200m step out from the prior 200m step-outs from the Magambazi Main zone reported on May 3
The hole therefore implies to us a further 200m of strike length extension for a total of 700m, which is roughly double what we assumed in our resource estimate of April 28
MZGD048 cut 60m of 1.67 g/t from 109m down-hole (note that the depth is not particularly meaningful because the Magambazi Main zone mineralization dips steeply and outcrops at surface). The broader interval started with 23.5m of 2.86 g/t.
The hole was located 200m north of the step out holes reported May 3 – these cut 22m of 6.7 g/t, including 9.5m of 12.8 g/t in MGZD045, and 21.2m of 4.8 g/t, including 11m of 7.9 g/t. Note that we use these holes as the reference because the company believes (and we concur) that the mineralization in MZGD048 is representative of the Magambazi Main zone rather than the closer Magambazi North zone.
The Magambazi Main zone is distinct – it dips steeply to the west, has two distinct higher grade lodes within a coherent alteration package that grades, and has noticeably less sulphide and a slightly different sulphide assemblage. The Magambazi North zone consists of several lodes that dip shallowly to the east.
Impact – A Positive Re-Interpretation of the Geology
The discovery of what appears to be the Magambazi main zone in the area of Magambazi North implies to us that the prior interpretation of there being two zones is false. It seems the new interpretation would be that the two ‘zones’ are actually parallel or, more likely, they represent limbs of a single synclinal fold (think of a big U with the west part being Magambazi North and the east part being Magambazi Main).
Taking this interpretation a step further, we may assume that the limbs connect at depth, probably at 250m or so in this area, and that the company would be able to trace Magambazi North over 800m of strike length to the south to line up alongside (to the west of) Magambazi Main.