By Steven Ralston, CFA
Pelangio Exploration (TSXV:PX.V) and (OTC Markets:PGXPF) is a junior gold exploration company currently continuing with a Second Phase diamond drilling program at the company’s Manfo property located in Ghana. Thus far, Pelangio has drilled 178 holes totaling 37,313 on the Manfo property in a program targeting over 40,000 meters. The pace of drilling increased with the addition of a third drilling rig in early 2012.
During the first quarter, a follow-up induced polarization (IP) survey was completed at Manfo. The 350 line kilometer program identified over 15 new targets in areas of high resistivity where cover appears to mask underlying gold mineralization that geochemical surveys cannot detect. Recently, nine diamond drill holes totaling 1,891 meters tested a newly drilled area named Nkansu, which is located between the Pokukrom East and Nfante West.
Yesterday, the company announced that drilling results at Nkansu have discovered bulk gold mineralization along a distance of approximately 700 meters, which is open to the northeast and southwest. The pilot holes at Nkansu tested the north and south peripheries of a well-defined high resistivity IP anomaly that was also identified by high resolution airborne magnetics.
The assay results at three drill holes in the southern portion of Nkansu were particularly noteworthy with one hole (SGDD-201) intersecting 0.57 g/t gold over 70 meters, including 1.00 g/t over 12 meters and another (SGDD-203) intersecting 0.77 g/t gold over 23 meters, including 1.06 g/t over 12 meters. The third hole (SGDD-207) intersected 0.39 g/t gold over 31 meters.
A combination of airborne magnetics and responses to IP and resistivity surveys appear to be a valid methodology for discovering gold mineralization in areas of Manfo where hardpan cover (duricrust) obviates productive analysis of geochemical surveying. Utilizing this new model of airborne magnetics in conjunction with IP and resistivity surveys, over 15 targets of prospective gold mineralization have been identified for further testing.
We maintain our Outperform rating and price target of $1.10 due to the company’s continued positive drilling results. We expect that an estimate of the inferred resources from a NI 43-101 compliant report on the Pokukrom East, Pokukrom West and Nfante West deposits at Manfo will be announced later this year.
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