Algold Resources Ltd. (TSXV: ALG) has announced additional drill results from its Phase I 10km drilling campaign at its Tijirt Property in Mauritania.
Results were highlighted by 30.03 g/t Au over 3 m (T16RC070) and 6.64 g/t Au over 5 m (T16RC045) and highlight the strike extent of the Eleonore target
(over 3.1km) and the higher grade nature of this target. These results continue to highlight that resource growth is likely and that ongoing exploration
success is likely to result in a larger resource than suggested by the current share price, providing upside potential for investors.
Results suggest resource growth likely. The drill results released today were from the Eleonore, Nancy, Lily and Sophie II zones. Importantly,
results continue to confirm Eleonore’s 3.1km strike length and suggest the potential for three higher grade zones within the larger area (North, Central,
and South). It is worth noting that the balance of the holes released for the most part intersected mineralization, however there were a number of
narrow, low-grade intercepts. This is the nature of exploration and it appears that a number of these holes were testing the boundaries of the deposit
and consequently the results are not of significant concern to us at this point. We note that the company also drilled metallurgical test holes with
a plan to release initial metallurgical test work later this year. In our view, these results continue to support our view that Algold’s maiden resource
270,490 oz Au (M&I+I) at an overall grade of 1.71 g/t, based only on historic work, is set to grow.
Exploration success has returned the share price. Algold still trades at a premium to peers at C$149/oz versus other West African peers
at C$51/oz. This essentially implies the market is expecting the resource to grow by ~2.9 times from the recent update (~790k ounces), which appears
to be mildly conservative, based on the size and quality of the targets being explored. We believe that the pending results from Phase 1 (drilling
complete), the upcoming results from Phase II drilling coupled with the updated resource later this year should justify Algold’s valuation and likely
provide continued momentum for the share price.
Company Description: Algold Resources Inc (TSXV:ALG) is an early stage West African gold exploration company that controls meaningful
land packages to the North and South of Kinross Gold’s (TSX:K, NYSE:KGC) Tasiast mine in Mauritania. The team includes Benoit La Salle (Chairman) a
founder and former CEO of SEMAFO and Francois Auclair (President and CEO), who was the General Manager of Tasiast during its early stages of development.
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