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Friday, September 29, 2017 Derek Macpherson

GWM Updates Clarence Stream Resource Estimate


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Galway Metals Inc. (TSXV:GWM) reported an updated resource estimate completed on its Clarence Stream project, in New Brunswick. The updated resource includes a maiden open-pit resource, suggesting both open-pit and underground potential versus the underground only scenario defined in the previous resource. Total ounces increased by 54%, despite only 50 new holes (~11,500m) being incorporated in this update. In our view, the project continues to have exploration upside, with assays from completed holes pending. The company is planning additional exploration work at both Estrades and Clarence Stream to further expand resources and with success should help close the significant valuation gap between Galway (C$17/oz) and peers (C$37/oz).


Update adds pit-constrained resources. Galway’s Clarence Stream now hosts a total of ~390k oz Au (M&I) grading 1.96 g/t Au and 277k oz Au (Inferred) grading 2.53 g/t Au, an increase of 54% (Figure 1). The previous resource estimate completed in October 2016 focused on underground resources only, the update combines underground and a new pit-constrained estimate (M&I: ~350k oz Au, Inferred: ~150k oz Au), to incorporate near-surface mineralization in the South and North Zones. In adding the pit-constrained option, cut-off grades have lowered from 3.00 g/t Au underground only (2016) to 2.55 g/t Au for underground and 0.42 g/t Au for open-pit (2017). The resource extends over a strike length of 1.6km, which has been increased by over 1km with recent drilling.


Drill results pending; more exploration to come. 69,761m of drilling in 496 holes were included in the updated resource estimate for Clarence Stream. Results for 20 holes are still pending from the North (9 holes) and South (11 holes) Zones, which have been designed to further expand resources, these results were not included in the updated resource. An additional 11 holes were drilled at Jubilee, 5km southwest of the South Zone, targeting a new satellite resource. Further exploration work is planned, as well, the company’s next steps include a PEA.

Exploration should help close valuation gap to peers. Galway currently trades at a discount to peers, or C$17/oz versus peers at C$37/oz. Continued exploration success will likely be an important catalyst for the company and should help close the valuation gap to peers. Upcoming drilling at Estrades will continue to be a combination of shallow and deep holes as the program focuses on expanding resources, as well as exploration of satellite targets at Clarence Stream. 

 
Derek Macpherson | VP Mining Analysis
Victoria Ellis Hayes | Associate
 
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Galway Metals Inc. - TSXV:GWM - 2

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