Paragon Minerals Corp (PGR-V;
.21) released the first set of drill holes
from this year’s program at South Tally
pond, including the best hole drilled at the
project to date. Hole LM10-43 intersected
30.1 metres grading 9.3% zinc, 2.3%
lead, 0.9% copper, 60 g/t silver and 1.4
g/t gold. This hole is located between two
earlier holes (14 and 17) which returned
good VMS intersections though neither was
as thick as 43. Thee other holes reported
were drilled 100 metres north of hole 43.
Assays are awaited for these holes and for
16 metres of stringer zone immediately below
the intersection described above but
none of them sound like they will be high
grade. Drilling is currently testing a 300 meter
off-hole conductor to the north of the
known zone. Hole 43 was a very strong hole
that has increased the potential tonnage
within the known boundaries of the system.
That has helped PGR’s market, but a hole in
a “new” area like the ones being drilled now
would have a bigger impact by far, as would
a hit on one of the other regional targets
PGR may test as part of this program.
Also announced this month was a 43-101 resource
calculation on the Huxter Lane project
where JV partner Golden Dory Resources
(GDR-V) is earning a 70% interest. The Mosquito
Hill zone is estimated to contain about
563,000 ounces in the Indicated and Inferred
categories at an average grade of
about 0.49 g/t gold in an intrusive hosted
setting near surface. Golden Dory plans to
start a follow up drill program shortly to expand
and upgrade the resource. We think
the announcement is good news though the
grade appears low and Mosquito Hill will
need a higher grade starter pit area and a
larger overall resource to look viable. Crosshair
Exploration (CXX-V) is drilling on its JV
with Paragon at the Jacqueline gold project
and PGR will be completing a small drill program
on a JV’ed VMS project.
In short there should be lots of news flow
over the next 3-4 months. If enough of that
news is good PGR should be able to move up
another level and finance again to keep the
news coming. As we noted earlier, PGR made
the difficult choice of holding off and not doing
a really large cheap financing so it still
has a good share structure and low market
value. The latest South Tally release in particular
reinforces the potential of this project
for more discovery holes and we consider
PGR a buy in this range while testing is going
on.