The drillers at the Friday Gold Mine in Idaho have pulled up core from 234 metres down with a thread of visible gold in it more than a centimetre long.
It’s the first hole at Elk Range Mining’s (ASX: ELK) Friday mine and the crew has now finished it at 337 metres.
Elk’s CEO Edward Keys grew up in Calgary canoeing rivers and finding dinosaur bones along them. He’s been picking things out of rock by eye ever since, and his geologists have now spotted gold at five depths in this hole.
“For a geologist, it doesn’t get much better than opening a core tray and seeing visible gold, and it’s rare to see this many distinct occurrences in a single drill hole.”
Edward Keys, chief executive officer of Elk Range Mining
We’ve now written three pieces about gold the geologists have seen at Friday and we’re as keen as anyone for a grade. The core is at the lab on a rush order and the numbers are just a few weeks away.
Elk Range Drills 200 Metres Past the Old Hole
Friday is a built and permitted underground gold mine in the hills of central Idaho. The last owner parked it during Covid and Elk is back drilling it with gold at more than double the price it was when Friday shut.
We’ve been writing about one old drill hole at Friday since the day ELK listed. A crew drilled it in 2014 and it ran 112 metres at 5.22 grams of gold a tonne, with the last three-quarters of a metre coming back at 133 grams.
Their drilling plan ended at 137 metres, so they pulled the rods out and went home.
Elk started its hole eight metres away and ran it alongside the old one. In September the geologists saw seven specks of gold at about 122 metres, and we wrote about it here.
Visible gold in Elk Range’s core from 234 metres down, circled in red
Then the drillers kept going. Some of them used to mine at Friday, and they took the hole another 200 metres into ground with hardly any holes in it.
The geologists saw gold again at about 124 metres, then at 139, 160 and 234.
Keys says the gold is showing up in the structures Elk’s geological model predicted, and the same rocks and structures carry on below where the old hole finished.
A $20 million explorer would be thrilled with one sighting of visible gold in its first hole, let alone the number Elk’s geologists logged between 122 and 234 metres.
What sits past the end of the old hole is the reason we bought ELK shares, and the geologists have now seen gold in three places past it.
What the Gold Assays Could Do for ELK
Elk has two lots of rock at the lab and expects both back in late October or early November.
The core from the new hole went on a rush order.
Elk has also sent 113 metres of the 2014 core to be tested again. Friday’s gold is coarse and bunches into specks, and the 50 gram scoop the 2014 lab tested from each sample can miss them.
Elk is testing 500 grams at a time, and we wrote more about it in September.
Earlier owners drilled around 386 holes at Friday and reported them under an overseas code, and the numbers need Elk’s own drilling behind them before they count on the ASX.
This hole is the first of eight and Elk drilled it beside the best of the old ones. If the lab comes back with grades close to 5.22 grams over 112 metres, Elk has confirmed the standout result at Friday with its own core.
Elk says plainly in the announcement that nobody can work out a grade by looking at gold in core. A metre of core at Friday can carry a lot of gold or hardly any.
The drillers are already on the second hole and working around the clock. Elk drilled much of the first hole on a single shift and has run two shifts on the second from day one.
Why We’re Holding Elk Range Mining (ASX: ELK)
ELK trades at 16c for a market cap of roughly $20 million. It had $6.7 million in the bank at the end of September.
Take out the cash and investors are paying about $13 million for a mine the last owner spent more than US$40 million building.
The decline and the mill are already built on top of the ground Elk is drilling.
Investors pay up quickly for high-grade gold holes in this market, and we think ELK could look cheap in a hurry if its first hole matches one that finished in 133 grams.
We bought at 20c in the float and we’re still holding. We’re happy to wait a few weeks for the lab.
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