Montreal-based Golden Tag Resources (CVE:GOG) saw its shares rally after announcing what it called "encouraging" drill results from three recent holes at its San Diego property in Mexico, which expand the bulk mining potential of the asset.
The holes are part of an ongoing surface drill program at the project, and the company said they confirm a 100 metre extension to the west of wide zones of mineralization discovered in 2011.
Mineralization currently has a strike length of 200 metres, a width of 130 metres and a vertical height of 300 metres, Golden Tag said, with mineralization remaining open.
The latest results include 148 grams per tonne (g/t) silver equivalent over 241 metres, and 119 g/t silver equivalent over 233 metres.
The property is a 50/50 joint venture between Golden Tag and Golden Minerals Company (AMEX:AUMN)(TSE:AUM).
Golden Tag is the operator and is earning an additional 10 per cent interest in the property by spending $3 million of exploration expenses.
The company said it is "encouraged, particularly by results to date in this phase 6 program where a new style of mineralized endoskarn was discovered".
"This provides further support for a potential Bulk Mining model for the deposit. It is clearly a large zone, which remains open for further expansion within and around the contacts of the Diorite," the miner said in a statement Monday.
The company is in the midst of advancing an updated NI 43-101-compliant resource estimate for the project, which is expected in late November.
The technical report will include the results from 10,400 metres of drilling completed as phase 5 in 2011, and the additional 5,500 metres of drilling in the current phase 6 program.
Shares of Golden Tag were up by 5 cents at 25 cents as of late Monday morning.