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Yesterday, Rye Patch Gold Corp. (TSX VENTURE: RPM) (OTCQX: RPMGF), announced an update on the Company’s 100% owned Garden Gate Pass (GGP) project located along the Cortez trend - one of Nevada’s most prolific gold trends. This project is located in close proximity to Barrick Gold's Cortez Hills mine and is surrounded by gold mines and gold discoveries belonging to Barrick Gold and other upcoming gold explorers.
The company highlighted that the twin gold discoveries made by Barrick Gold, namely the Red Hill and Goldrush deposits, continue to expand in size and scope. Barrick Gold reported that it has doubled the gold resource from their September 6, 2011 announcement, which now stands at 7 million ounces in the indicated and inferred categories. More importantly, Barrick Gold believes that it has connected these two discoveries and the gold system remains open in several directions within this highly prolific gold district. The recent announcement by Barrick brings the spotlight back to RPM’s projects in the Cortez area.
This announcement has strong positive implications for Rye Patch Gold. Its Garden Gate Pass Gold project is in close proximity to these two discoveries. The gold intercepts discovered by Barrick immediately to the north of Garden Gate Pass indicate the continuity of the system on this project, which could be further explored by RPM. Targets on the Cortez trend can result in Carlin type deposits. The two main characteristics of such deposits are that they tend to cluster and are generally huge in size, ranging between 5 million to 10 million ounces.
If Rye Patch is successful in pursuing a focused drilling program, it has the potential to establish a large sized deposit at the project. The recent drilling undertaken during 2011 by the company at the GGP had resulted in encouraging results and had provided important clues to the company. The drill results from the last phase of the drilling provided sufficient evidence that a potential gold deposit is likely present at the GGP project.
Today, the company also provided an update on its recently acquired 100% owned Rochester project. This project is located along the emerging gold and silver Oreana trend in west-central Nevada and contains 402 senior unpatented lode mining claims covering 30.3 square kilometres. These claims previously belonged to a wholly-owned subsidiary of Coeur d'Alene Mines (TSX: CDM) (NYSE: CDE). As per CDM’s own admission, these claims staked by RPM may involve up to 20 percent of the Rochester property's mineral resources and a substantial amount of the property's mineralized material.
CDM is currently disputing that now these claims belong to RPM. Based on past precedents and our research, we believe that RPM has a strong case on the seniority of these claims. A recent court decision supported its position when it allowed RPM to carry any exploration activity on most claim areas barring the claim areas belonging to the active mine area.
After the court decision in December of 2011, Rye Patch Gold started exploration work on the majority of these claims in the area. It has been conducting various activities such as rock chip sampling, ground magnetics and reverse circulation drilling. The company announced today that the results of these programs are very encouraging. For example, the rock chip samples with gold values ranging between 0.243 g/t gold and 87.39 g/t gold were reported from the Sunflower Hill area rock. We believe that Rye Patch will continue to work aggressively to advance the exploration program at the Rochester project, which contains 5 active discoveries, and will continue to explore further on these claims.
Rye Patch Gold Corp (TSX VENTURE: RPM) is an advanced stage exploration company which has NI 43-101 compliant estimate of 3.9 million ounces of total gold and gold equivalent resources. All its projects are in Nevada, which continues to be a very active gold mining region and is home to gold majors like Newmont Mining Corp and junior exploration companies such as Klondex Mines Ltd (TSX: KDX) (TSE: KDX) and US Gold Corp (TSX: UXG) (TSE: UXG) (NYSE: UXG) among others. The recent acquisition of Fronteer Gold by Newmont has brought attention to junior gold companies in Nevada with sizable resource ounces.
Disclosure
Ubika Research has received compensation from Rye Patch Gold Corp for providing analyst research coverage
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