Impact: Mildly Positive
Contact Gold reported an initial resource estimate for its 100%-owned Pony Creek gold project in Nevada. The open pit constrained inferred resource contains 433,000 oz Au at 0.52 g/t Au. The resource is contained in three zones: the Bowl, Appaloosa, and Stallion zones, with the Bowl deposit containing ~79% of the total. We note that Pony Creek is one of the company’s two advanced exploration-stage, Carlin-type gold projects in Nevada. We believe this is a positive step toward further exploration and development at Pony Creek. The initial resource establishes a foundation for Contact Gold to build from, and while we believe the company would need to delineate more oxide material to make a stand-alone heap leach operation, there are multiple targets ready to be drilled that could potentially contribute additional ounces.
