Outcrop Silver & Gold Corp. (OCG:TSX.V; OCGSF:OTCQX; MRG1:DB) identified three additional high-grade vein targets at its Santa Ana silver-gold project in Colombia, reported Research Capital Corp. analyst Stuart McDougall in a June 20 research note.
"Although it's still early days, we think these latest additions lend further support to our expectations for the project's future expansion to 50,000,000 ounces of silver, so we continue to base our target price on that eventuality," McDougall wrote.
That target price is CA$0.75 per share and reflects a large projected return for investors, of 341%. Outcrop's current share price, in comparison, is about CA$0.17. The company is rated Speculative Buy.
Veins boast high grades
Outcrop discovered all three of the new veins in Santa Ana's northern half while doing regional mapping and sampling to identify new drill targets, McDougall noted. He presented channel sampling results from each vein.
Murillo: This vein is of "particular interest," McDougall wrote. For one, it lies at the intersection of Paraiso and El Dorado veins that together comprise half of the total existing Santa Ana resource. Two, similar to Paraiso, Murillo showed potential for both bonanza grades of both gold and silver.
Specifically, the high grades of mineralization in one notable surface channel sample were 58.07 grams per ton gold (58.07 g/t Au) and 2,860 g/t silver (Ag). This ran across 0.75 meter (0.75m) of quartz vein.
Another channel sample ran 12.38 g/t Au and 265 g/t Ag across 1m of quartz vein.
Outcrop's two other new discoveries, Palomos and La Linda, are on either side of the main structures and as such, extend the overall width of the prospective area to 3 kilometers.
Palomos: This vein lies 550m east of and sub-parallels the Santa Ana vein system. Outcrop traced it on surface and in old mine workings for 400m.
On sampling, the highest grades came from the historic Palomos 2 mine, where an underground channel averaged 25.18 g/t Au and 495 g/t Ag across 0.4m of quartz vein. A related surface exposure ran 8.26 g/t Au and 185 g/t Ag across 0.5m of shearing.
La Linda: Outcrop traced this discovery, located 800m west of the El Dorado vein, "for nearly 500m in outcrop and float trains containing pyrite, galena and sphalerite in schists," McDougall wrote.
Two standout channels extended across 0.4m of quartz vein. One ran 9.15 g/t Au and 79 g/t Ag, the other, 6.5 g/t Au and 37 g/t Ag. Quartz vein float ran up to 8.54 g/t Au and 2,987 g/t Ag.
More to come
Going forward, McDougall noted, investors should keep an eye out, on an ongoing basis, for further exploration updates as they are expected and any could catalyst Outcrop's stock.
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