Shares of TNR Gold Corp. (CVE:TNR) shot up over 16 per cent Tuesday, as the company touted the Los Azules copper project as a potentially important “value driver”, after recent drill results showed significant intercepts of high to medium grade copper mineralization west of the original deposit.
The Los Azules copper project is located in San Juan, Argentina and is considered one of the largest undeveloped copper projects in the world.
The 25-per-cent interest, when taken in the context of the whole property, would be equivalent to around a 15 per cent stake in the total estimated resources at Los Azules. If TNR chooses to back-in for five per cent or less, or has its interest diluted by that much, it will receive a net smelter royalty of 0.6%.
The junior gold company noted that in a news release last week, McEwen unveiled results from nine new drill holes completed on the property, which included intervals from two drill holes located on the Escorpio II mineral claim, part of the land package included in TNR's back-in right.
In hole 12106, McEwen reported that it intercepted 116 metres at 1.01-percent copper, 206 metres at 0.55-percent copper and 68 metres at 1.18-percent copper. Meanwhile, hole 12114 hit 150 metres at 0.70-percent copper.
McEwen has completed 15,800 metres of drilling this season, with the results to be incorporated into an updated resource estimate to be released by the end of May that will help form the basis of a new preliminary economic assessment (PEA) - expected in the third quarter this year.
"McEwen Mining continues to prove up the potential of the Los Azules project,” said TNR non-executive chair Kirill Klip. “I especially welcome the discovery of higher grade material and look forward to reading more as the project evolves over time.
"This project has the potential to become an important value driver for TNR Gold and our shareholders."
Vancouver-based TNR Gold in February said its main focus going forward would be the development of its Shotgun gold deposit in Alaska, from where it recently released the best drill results ever obtained from the property.
At Shotgun, the company has a 100-per-cent ownership and is looking for a large, bulk-tonnage gold deposit, similar to what is being developed at the Donlin gold project by NovaGold (TSE:NG) (AMEX:NG) and Barrick Gold (TSE:ABX) (NYSE:ABX).
The property holds an historic (pre NI 43-101) resource of about 1 million ounces so far, and a significant result of last year's program was that it opened the door for discovering a much larger deposit.
The company has said that all of its other assets will be advanced based on joint venture models or converted into the stakes in the companies developing them and/or royalties attributed to them.
TNR’s shares were lately up 16.67 per cent, or 1 penny, trading at 7 cents.