Atac shares jump on Yukon gold drilling intercept; result 'positive' - analyst

Exploration drilling in the Yukon continues to yield strong gold intercepts for Atac as it explores the highly prospective Rackla gold belt.

VANCOUVER, BC -

Atac Resources (TSX-V: ATC) cut strong gold grades over a long interval in a step-out drillhole following up on last year's single discovery hole at the Conrad zone. Drillhole 10, a 100 metre step out to the east of the discovery hole, hit 115 metres @ 3.15 g/t gold starting 176 metres downhole.

Atac also returned 15 metres @ 1.64 g/t Au in drilling below the discovery hole, which cut 21 metres @ 8.03 g/t Au.

Atac's shareprice shot up following news of the drilling results and was trading up 5 percent at C$8 as of presstime.

Paradigm Capital Analyst, Jonathan Case, who covers Atac for Paradigm clients, said that while he wouldn't get too excited with a a single step-out, it was nonetheless a "positive" result as it showed strong mineralization over a wide zone.

"I think that's pretty significant," Case said, putting it in terms of what he characterized as Atac's need to build tonnes in the hopes of outlining a few million ounces gold in the area to justify the cost of bringing in infrastructure to support a mine there someday.

Case said he was maintaining a hold on Atac stock.

While Case pointed out that with the drilling results out so far it's too early to map potential continuity of gold mineralization between Conrad and nearby zones such as Osiris and Eaton or, for that matter, to break out the calculator and guess at potential ounces in the ground, the latest results are nonetheless important for Atac.

"To me this is back filling" Case said. "To me this is meeting the expectations."

Atac continues to drill the Conrad zone where 400 metres east in the Eaton zone it hit 40 metres @ 1.61 g/t Au last year. About a kilometre to southwest of Conrad in the Osiris zone Atac also hit as much as 65 metres @ 4.65 g/t Au in 2010 drilling.

These zones fall in what Atac calls the Nadaleen trend and in turn they lie about 100 kilometres east along the Rackla gold belt from a second key area of exploration for Atac called the Rau trend. At Rau Atac hit as much as 96 metres @ 4.04 g/t Au in sulphides and 28 metres @ 24.07 g/t in oxides in the Tiger zone. It also recently discovered strong silver-lead-zinc mineralization in drilling the Ocelot zone.

With those exploration successes have come high investor expectations for Atac, which has a C$780 million market capitalization. Those expectations, Case noted, stem from Atac's discovery of gold mineralization in wide-ranging limestone units which it likens to Nevada's gold-rich Carlin formation.

The hope underpinning Atac's market capitalization, Case suggested, is that Atac's 1,600-sq.-km of concessions in the Rackla gold belt hold some 20 to 30 million ounces gold, that it is a "another Nevada," as he put it.

"That's the bet," Case said.

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