Reprinted with permission - #483, May 7, 2012
Hard Rock Advisories - Special Delivery:
Kiyuk Comes Through
Prosperity Goldfields (PPG-V; off 5 cents on 187 shares at
.59) just released the first drill results from its spring program at the Kiyuk Lake gold project in Nunavut. PPG battle some pretty awful weather conditions to complete a 12 hole drill program before spring break up. Fuel is in for a summer program that can begin once the melt is over and things dry out. Prosperity tested several targets during this phase, notably the Rusty target where a single hole last year encountered 157 metres grading 1.7 g/t. It was an impressive hole but, as we noted in our January review, one hole doesn’t tell you very much about the geometry of the zone and more holes would be required to gauge the dip and true thickness of Rusty.
The first three holes of the 2012 program were drilled at Rusty and all encountered multiple gold intercepts. While there are still not enough intercepts on a single section to have a firm handle on the geometry of the zone it’s clear that last year’s hole was not a one shot wonder. Hole 12-01, drilled with a 50 degree westward dip to cross the plane of last year’s hole produced seven separate intercepts including 23 metres grading 1.5 g/t, 10.5 metres grading at 3.87 g/t, 10.5 metres grading 4.56 g/t and 8.9 metres grading 5.6 g/t gold. With two holes only on this section it’s still difficult to interpret the true dip and hence true width but the overall zone looks like it’s over 50 metres thick with a couple of sections of internal waste and this does not include the strong outlying intercepts. More impressive still was was Hole 12-03, a step out of nearly 200 metres to the south of Hole 1 that returned intercepts of 19.5 meters grading 3.49 g/t and 10.5 metres grading 7.17 g/t and 61.5 metres grading 3.34 g/t gold. Hole 3, slightly south of hole two, was the weakest of the set but not really weak with several intercepts including 9 metres grading 5.4 g/t and 18 metres grading 3.47, a hole most explorers would have been happy to have on its own.
While the geological model for Kiyuk is still something of a mystery, the important takeaway from this release is that the zone that produced the best intercept last year clearly has some legs. Of potentially equal importance, PPG has established a spatial relationship between gold grades and magnetic accessory minerals. This could be an important development that could improve targeting substantially which is why the next phase of work will have both airborne and ground magnetic surveys at its start. The markets looked pretty scary before the opening which probably held many people back from bidding on this news. There may be been some that hoped for another 150 metre intercept. That would have been nice, but if you look at the cumulative grade times thickness (a measure I don’t like personally but which many other’s use) for Hole 3 you get a total of 349, as compared to the grade times thickness for last year’s Hole 1 of 267. In short, the strong gold content has been replicated and Rusty, only one of several known zones, has been shown to have a strike of at least 200 metres and a thickness of 50 metres or more at good grade. This is the kind of zone that can build real tonnage and there are still 9 holes from other areas on the way before the next phase of work starts. The market is not paying up for PPG today but I think it will later. This looks good enough to move PPG to a Strong Spec Buy rating in this price range.
Regards for now - Eric Coffin
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Questions or Comments? Please Contact:
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Dwane Brosseau
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Prosperity Goldfields Corp.
Suite 800, 789 West Pender St.
Vancouver, BC V6C 1H2
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Toll free: 1 855 237 6274
Direct: 604 662 3380
info@prosperitygoldfields.com
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