By Steven Ralston, CFA
Pelangio Exploration (TSXV:PX.V) and (OTC Markets:PGXPF), a junior gold exploration company currently continuing with a Second Phase diamond drilling program at its Manfo property, has announced the discovery of another gold deposit, Sika North.
Located approximately four kilometers northwest of the company’s Pokukrom East deposit, Sika North was first delineated by soil geochemistry during the company’s due diligence conducted in mid-2010. The soil sampling consistently returned strong values in excess of 40 parts per billion over an area 700 meters long and between 100 and 300 meters wide. At each end along strike, soil sampling returned stronger values in excess of 100 parts per billion. In the southernmost area of stronger values, which covers an area of approximately 30,000 square meters, a diamond drill hole (SODD-250) intersected 1.78 g/t gold over 15 meters, including 6.74 g/t high-grade gold over 3.5 meters. Also, at further depth, low-grade gold was assayed at 0.44 g/t over 23 meters. Sika North also contains another smaller anomaly identified by geochemical and geophysical surveying, but which has not yet been drilled.
Sika North represents the seventh area of gold mineralization discovered at Manfo, joining the Pokukrom West, Pokukrom East, Nfante West, Nfante East, Nfante Central and Nkansu. The discoveries are a result of an aggressive diamond drilling program that was increased to 40,000 meters in early 2012. Thus far, Pelangio has drilled 178 holes totaling 37,313 meters.
Management now expects to file an initial NI 43-101 compliant inferred resource report on three deposit areas (Pokukrom East, Pokukrom West and Nfante West) in the first quarter of 2013. This initial resource estimate will utilize assay results from 154 drill holes totaling 32,333 meters.
We maintain our Outperform rating and price target of $1.10 due to the company’s continued positive drilling results. We expect that the NI 43-101 compliant inferred resource report will act as a catalyst for price appreciation.
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