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Minera Alamos shares soar on back of new discovery at Santana gold project

Published: 11:34 25 Oct 2018 EDT

gold mining
Minera Alamos' Santana gold project is located southeast of Hermosillo, in Sonora State, Mexico

Mexico-focused Minera Alamos Inc (CVE:MAI) saw shares jump higher Thursday after it announced the discovery of a new broad zone of gold/silver mineralization in its Phase 1 drill program at the Santana gold project.

Shares of Minera Alamos were up 13.0% at C$0.13 on Thursday.

The company said the discovery drill hole into the new Divisadero zone was drilled approximately 200m north of the known mineralization limits at the Nicho Main and Nicho Norte zones and returned a wide intercept of disseminated gold, silver and copper mineralization in a previously underexplored part of the Santana Property.

The company said based on surface exposures and known geology, the mineralized system appears to be open to expansion in all directions.

WATCH: Minera Alamos finds new target area at Santana Gold Project in Mexico

"This new discovery hole is an extremely exciting development for the company," said chief executive officer Darren Koningen. 

"One of the driving factors behind the merger between Minera Alamos and Corex earlier this year was the significant untapped potential we believed we could unlock once the two companies' contiguous land packages were combined. As our knowledge base grows and we continue to better understand the regional geology we should continue to find additional mineralization. The discovery of the Divisadero area provides further evidence that the mineralizing events that occurred in the Nicho area are present at shallow depths elsewhere on our extensive property holdings."

Drilling highlights included 95.7 m (meters) of 0.85 g/t (grams per ton) gold, 9.8 g/t silver and 0.33% copper in one hole from 32 m. 

The Phase 1 drilling program has now concluded with the completion of ten holes totalling around 1500m.

Planning of the Phase 2 drill program will begin once the remaining drilling results have been received and interpreted.

Guadalupe de los Reyes Option Payment Extension

The company also announced that Minera Alamos and Vista Gold Corp have agreed to extend the due date for the second US$1.5 million option payment for the Guadalupe de los Reyes gold/silver project in Sinaloa, Mexico by six months to April 23, 2019. 

As consideration for the deferral, Vista will receive an additional US$150,000 in cash, US$50,000 of which has already been paid and US$100,000 of which will be paid no later than January 23, 2019. In addition, Vista will receive interest at a rate of 1.5% per month on the deferred amount beginning January 24, 2019.

Contact Katie Lewis at katie@proactiveinvestors.com

Follow her on Twitter: @kelewis

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