Canadian explorer Sitka Gold (TSXV: SIG) said assay results from drilling at its RC gold project in Yukon suggest the deposit could contain significant tonnage at greater depths than first thought.Hole 76 in the project’s Blackjack zone returned 94 metres grading 1.15 grams gold per tonne from 437 metres downhole, including 12.2 metres of 4.55 grams gold, Sitka said Thursday in a statement. A separate interval cut 25 metres of 5.04 grams gold from 591 metres downhole, including 1.8 metres of 54.7 grams within 86.4 metres of 1.65 grams gold.The results come about four months after Sitka more than doubled the gold resource for Blackjack. Resources in the indicated category at Blackjack are now estimated at 1.29 million oz. at a grade of 1.01 grams from nearly 40 million tonnes.While the results seem promising, investors may have been anticipating higher grades after Sitka last month reported drilling results from Hole 75, which intersected 352.8 meters of 1.55 grams gold, including 108.9 metres of 3.27 grams gold and 45 metres of 4.52 grams gold. Investors might also be waiting for a formal update to the mineral resource estimate to assess the RC project’s value.“We think tighter spaced drilling will be required to demonstrate lateral continuity of mineralization for a potential underground mining scenario,” Michael Gray, an analyst at Agentis Capital, said Thursday in a note.Sitka shares fell 13% in early afternoon trading Thursday in Toronto. That gave the company a market value of about C$151 million ($108 million).Fully fundedHole 76 – part of a fully funded 30,000-metre diamond drilling program planned at RC for 2025 – is the deepest hole drilled to date at Blackjack. It was drilled to a length of almost 811 metres – about 100 metres deeper than any previous drilling.“The results from Hole 76 are very encouraging, confirming that the higher-grade gold mineralization intersected at depth in Holes 68 and 75 extends both laterally and to depth and could represent a large, continuous zone of significant tonnage,” Sitka CEO Cor Coe said in the statement. “We are now extending Hole 76 further into the depths of this gold system to continue tracking this promising high-grade gold zone as we push towards what could be the source of the Blackjack gold deposit.”Sitka last month raised C$11.8 million ($8.5 million) and said it would use the proceeds on exploration at RC. The bought deal financing was led by a group of underwriters including Agentis Capital, Paradigm Capital and Cormark Securities.Four rigsSummertime drilling at Blackjack is under way, with the first of four planned drills now turning, Sitka said Thursday. As many as three more drill rigs should start turning in the next few weeks.Located in Yukon’s Tombstone gold belt, RC covers about 431 square kilometres. It sits about 100 km east of Dawson City.
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