T.D. CommentCanaco Resources Inc. (CAN-V)
- Canaco released additional drill results from its Magambazi discovery in Tanzania
- The headline, Hole 98 cut 53.2m of 9.5 g/t approximately 40m to the north of previously-released Hole 66 (37m of 12.5 g/t)
Impact – Significant Positive
We expect the market to focus on the headline hole (Hole 98), which cut a very impressive 53.2m of 9.5 g/t gold. The hole was drilled in the Magambazi Main zone and intersected the western limb of the Magambazi fold system at what we estimate to be approximately 180m depth.
Management described the result as spectacular, and we would have to agree with its sentiment – in our view, any intercept that is representative (i.e. repeatable over a significant distance, not subject to grade smearing as many narrow/high grade results are, etc) and has a gram-metre product over 500 gm/t is exceptional, and particularly so in an open pit setting close to surface as in this case.
The results are reminiscent of the highlights of drilling released by another company at its world class project in Colombia. That company went on to release a Scoping Study that reported the potential for an underground mine capable of producing 301,000 ounces of gold per year at cash costs of $322/oz over the first six years from a resource of 3.5mm oz.
For reference, the pierce point is approximately 40m to the north and south of Hole 96 and Hole 66, which cut 48.6m of 14.8 g/t and 37m of 12.5 g/t, respectively. Whereas these holes intersected the keel of the fold (overturned anticline), we interpret Hole 98 to have intersected the western limb of the Magambazi fold system.
Anticipated Timeline
-Graduation to TSX – January
-Drill results from Ethiopian properties – January
-Drill results from the rest of the Magambazi Gold Trend outside of the Magambazi deposit itself – Q1/11
-Spin-out of Ethiopian properties – Q1/11
Feel free to contact us for additional information.
Regards,
Daniel Earle
Analyst, Metals & Minerals
T: 416-308-7906 ¦ F: 416-307-0512 ¦ C: 416-558-5301