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Surface Results To Point Explorer's Drills in Right Direction

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This gold explorer will use data from surface exploration work at its flagship project in Nevada to help target its drilling as it develops three different deposits on the site.

Gold explorer Western Exploration Inc. (WEX:TSX.V;WEXPF:OTC) has released the results of surface exploration work at the Gravel Creek resource area of its Aura project in Nevada.

The company will use the information from rock geochemistry and detailed structural mapping from 2022 to help target drilling with an eye on northeast-trending structural zones where there have been multiple high-grade gold and silver vein intercepts.

"Western Exploration has long believed in the potential to greatly expand resources within the Wood Gulch/Gravel Creek mineralized system," Western Exploration Chief Executive Officer Darcy Marud said. "This data gives us additional confidence for drilling in the upcoming field season."

The fieldwork data support the concept of northeast-trending structures as a secondary ore control to the Gravel Creek system, the company said.

Previous drilling at Gravel Creek found grades up to 40.05 grams per tonne gold (g/t Au) and 1,951 g/t silver (Ag).

Mining heavyweight Agnico Eagle Mines Ltd. (AEM:TSX; AEM:NYSE) invested in Western Exploration (it owns 18% of the company) because of Gravel Creek, Marud has said. Western Exploration wants to grow Aura — made up of the Doby George, Wood Gulch, and Gravel Creek deposits — from a more than 1-million-ounce (Moz) Au and 10-Moz Ag resource.

"The Aura gold-silver project in Nevada (is) one of the most attractive mining jurisdictions in the world," Fundamental Research Corp. analyst Sid Rajeev wrote when he initiated coverage of the company on Jan. 26.

Gravel Creek and Wood Gulch account for 60% of the project's resources, Rajeev noted.

"Geological models have identified a large footprint of prospective mineralized area (1 km x 3.5 km), which is more than three times the size of the current resource areas," Rajeev wrote. "Management is planning an aggressive resource expansion drill program this year."

Rajeev rated the stock a Buy and gave it a fair value of CA$3.48.

Western Exploration is looking to complete a preliminary economic assessment (PEA) for Gravel Creek in 2024.

The Catalyst: Expanding the Resource

The previous drilling intersected multiple gold-and-silver-bearing veins in the Miocene Jarbidge volcanic rock overlying and lateral to the Gravel Creek deposit, the company said. A cross-section through the deposit shows intercepts of more than 30 g/t gold equivalent (Au eq) in the Jarbidge rhyolite lie between 1,500 and 1,750 meters in elevation.

One core hole from 2020 tested for the presence of northeast-trending vein zones within the Jarbidge rhyolite. Hole WG450, drilled 190 meters northeast of the Gravel Creek resource, intersected three high-grade vein zones of 1.52 meters at 4.07 g/t Au and 363 g/t Ag, 1.83 meters at 7.22 g/t Au and 334.3 g/t Ag, and 0.3 meters at 37.1 g/t Au and 1,951 g/t Ag.

None of this data has been included in previous resource totals, the company said.

"The Aura gold-silver project in Nevada (is) one of the most attractive mining jurisdictions in the world," Fundamental Research Corp. analyst Sid Rajeev wrote.

Drilling "is planned to verify structural trends and continuity of mineralization, with the ultimate goal of adding the known mineralization into the project resource base," Marud said. "The data also (give) us further encouragement to continue to evaluate the Gravel Creek resource area for new areas of mineralization."

More than 1,200 drill holes have been completed on the Aura project totaling more than 200,000 meters.

Western hopes to connect the Gravel Creek and Wood Gulch deposits, creating a “much larger footprint” with the potential for 2 to 5 Moz Au. The company also said a 3D geological model of Gravel Creek and Wood Gulch updated in 2022 significantly expanded the areas of prospective mineralization.

Precious metals mineralization at Aura was initially discovered at Doby George in the 1960s, but it wasn’t until the 1980s that Homestake Mining Co. discovered the Wood Gulch deposit. The project is 100% owned by Western and is about 32 kilometers north of the Jerritt Canyon Mine, which has been in operation since 1981.

Nevada Dominates US Gold Production

It is in an under-explored area of Nevada, the largest gold producer in the United States, accounting for 74% of the country's output in 2021, Rajeev pointed out.

Streetwise Ownership Overview*

Western Exploration Inc. (WEX:TSX.V;WEXPF:OTC)

*Share Structure as of 3/7/2023

The company released the final four holes from its 2022 drilling campaign at Doby George in January.

One of those holes, DGC794, intersected 26.06 meters of 6.93 grams per tonne gold (g/t Au), including 12.34 meters of 4.57 g/t Au.

Western Exploration is planning step-out drilling at Doby George later this year, plus metallurgical studies required for a preliminary feasibility study (PFS) for the deposit, which it plans to advance into production first while exploring and developing Gravel Creek and Wood Gulch.

Ownership and Share Structure

About 84% of the company is owned by strategic investors, including Golkonda LLC, a syndicate of dozens of high-net-worth investors, which owns about 66% of the company; and Agnico, which owns 18%.

Management and directors own about 3%, and other institutions own about 6%, the company said.

The rest is retail.

Western Exploration has a market cap of CA$50.37 million and has about 31.5 million shares outstanding, 11.2 million of them free floating. It trades in a 52-week range of CA$2.40 and CA$0.96.

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