Mega Precious Metals Inc. (
TSX: V.MGP,
Stock Forum) shares jumped 15% Thursday after the company said it is seeing growing evidence that its flagship Monument Bay project in Manitoba has the potential to become an emerging gold camp.
Trading at 4 cents, on volume of 1.9 million, Mega has a market cap of $6.9 million, based on 173.2 million shares outstanding.
That optimistic view is based on recent drilling activity which was designed to test multiple targets on the wholly-owned gold-tungsten project, which is located 570 kilometres northeast of Winnipeg, and southeast of Thompson.
Monument Bay is already known to contain 2.2 million measured and indicated ounces of gold, and 0.9 million ounces of inferred gold.
An additional feature is the tungsten resource of 253,000 measured and indicated metric tonne units (MTUs) of W03 (tungsten oxide), and 99,000 inferred MTUs of W03 with grades of 0.17%.
But Mega officials have previously said that the gold resource has significant potential to grow.
It is a forecast that was reinforced Thursday when the company said exploration drilling on regional targets has identified a new geological structure called the South Limb Shear Zone (SLSZ).
The company said SLSZ is located one kilometre south of and parallel to the Twin Lakes Shear Zone, the structure that hosts the known gold resource.
Exploration completed so far indicates that the Monument Bay Project hosts multiple mineralized deposits in a variety of host rocks along multiple structures, the company said.
These structures are indicative of large Ontario gold camps (such as Hemlo and Timmins),
the company said in a press release.
In early February, Mega said it had begun a 5,000 winter drill program. With two drill rigs deployed, it said the focus would be on resource expansion and the development of new exploration targets.
On Thursday, the company said approximately 2,700 metres of planned drilling has been completed so far, consisting of 10 drill holes that have tested multiple targets along each of the 27 kilometre-long Twin Lakes and South Limb shear zones.
The Monument Bay property consists of 136 contiguous claims for a total of 338 square kilometres.
The company has a memorandum of understanding with the Red Sucker Lake First Nation to cover certain portions of the project that lie within the traditional lands of the Red Sucker Lake First Nation.
Mega officials see potential development advantages in light of the current winter road access to its camp from local communities and Manitoba’s Northern Development Strategy which is building all-purpose roads and infrastructure improvements within the region.
The current power lines which connect Red Sucker Lake First Nation and God’s Lake Narrows First Nation currently have very low electricity rates (estimated at $0.02-0.04 per kilowatt hour) and are approximately 48 kilometres from the project area.
FULL DISCLOSURE: Mega Precious Metals is a client of Stockhouse Publishing.