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GT Gold copper-gold discovery interests veteran investors

GT Gold Corp.'s share price caught fire after it released a series of drillholes pointing to a new copper-gold discovery in British Columbia at a target called Saddle North on its Tatogga property. Its share price doubled over the past week.

Interest in the target began to grow in September when GT Gold said it drilled 822 meters grading 0.42 g/t gold, 0.26% copper and 0.62 g/t silver from a depth of 78.8 meters.

"Whoa. Congrats on a monster copper-gold discovery hole by Charlie Greig at GT Gold," said Robert McLeod, president and CEO of IDM Mining Ltd. and a veteran of British Columbia exploration, after GT Gold released it. He was referring to GT Gold's senior geologist.

Following the 822-meter intercept, GT Gold on Oct. 10 released assays from another two holes drilled at Saddle North. One hit 904 meters grading 0.51 g/t gold, 0.30% copper and 0.93 g/t silver from 15 meters, and the other hit 494 meters grading 0.25 g/t gold, 0.26% copper and 0.55 g/t silver from 31 meters.

The 904-meter intercept included a lengthy higher-grade portion near its end with 363 meters grading 1.02 g/t gold, 0.51% copper and 1.72 g/t silver. The drillholes covered about 150 meters of possible strike to about 500 meters of depth.

Drilling at the deposit continues. Amandip Singh, GT Gold's director of corporate development, said there would be about four more drillholes to come this year until weather conditions in the mountainous region bring the exploration season to an end.

"There's a week to two weeks of runway left," he told S&P Global Market Intelligence on Oct. 12.

This year Singh said GT Gold would likely test about 600 meters of the deposit's strike with some holes going to about 1,000 meters depth.

The drilling will not quickly translate to a resource. Singh said that GT Gold has not decided if it will have a Saddle North resource by the end of next year. "You only get to do a resource like this once and we want to do it right," he said.

It's not a cheap target to drill as it requires helicopter support with costs per meter of drilling around C$380. That may fall, as Singh said the company is assessing the construction of an access road for next year.

Veteran investors in the sector have not ignored the intercepts.

Exploration Insights were buyers of the stock after the September results came out, eyeing the potential for the deposit to grow into a sizable and attractive acquisition target for copper-gold miners. Exploration Insights analyst Joe Mazumdar considers the higher grades GT Gold drilled as comparable to deposits that can support block cave mines.

The location of the deposit also helps. "What we like is that it's a copper play, and we like copper, and it's in a low geopolitical risk jurisdiction," he said. "It's also near an active mine so trying to go do the logistics of how to build is a lot easier when you've got a mine right next door." Mazumdar was referring to the Red Chris copper-gold mine.

As a possible block cave, Mazumdar noted size will matter for the target. "You want to see something like 500 million to 1 billion tonnes," he said.

Exploration Insights plans to be in the exploration play for the long haul, albeit that commitment will depend on how drilling goes. "We'll be there for a while," he said. "It's a Reservoir sort of play." Exploration Insights were early investors in Reservoir Minerals that found the Timok deposit, which turned out to be a solid copper-gold discovery that Zijin Mining Group Co. Ltd. is in the process of acquiring.

Rick Rule, president and CEO of Sprott U.S. Holdings Inc., found the results interesting but raised a note of caution about British Columbia as far as hurdles to permitting.

"I like the results, technically," Rule said. "Early stage to be sure, but the neighborhood has treated Sprott well. Given that Canadians like Canadian plays, it likely trades higher, although winter will begin to impede news flow."