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Tuesday, March 07, 2017 Derek Macpherson

SCA Confirms Karankasso's Strike Potential


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Savary Gold Corp (TSXV:SCA) announced results from the first 24 holes from the ongoing 10km Phase 2 drill program at the Karankasso JV project (69.5% SCA/30.5% SWA) in Burkina Faso. Results identified new mineralized zones south of the existing resource. This first set of results returned a weighted average grade of 1.59 g/t Au, which is below the current resource grade, over a relatively narrow average width of 2.6m. The results were highlighted by 14.66 g/t Au over 6.0m (HE-RC-17-019) intersected in the southern part of the Serakoro 1 Main Area. In our view, these results confirm the strike potential at Karankasso and imply that the resource is likely to grow beyond the current 671k oz (9.2M tonnes at 2.28 g/t Au - inferred) with the pending update (H2 2017). Prior to that, further results from the ongoing 10km drill program is likely to benefit Savary’s share price, which at C$23/oz trades at a discount to peers (C$37/oz).


Two new gold bearing trends confirmed. Results from Serakoro 1 West were highlighted by hole HE-RC-17-012 drilled at the new eastern trend. The hole returned 2.55 g/t Au over a wide 17.0m interval, including 11.05 g/t Au over 1.0m. The trend was tested 400m along strike and appears to correlate with a 2km anomaly that was identified with auger drilling and the eastern edge of a geophysical IP chargeability anomaly. The western trend was tested by three holes 400m along strike, with the best hole returning 1.85 g/t Au over 7.0m (RC-17-009). Savary expects to follow-up on results with additional drilling.

High-grade intercept returned from a previously undrilled area. Results from the Serakoro 1 Main Area were highlighted by 14.66 g/t Au over 6.0m, including 21.69 g/t Au over 4.0m (RC-17-019). This hole was drilled in a previously undrilled area, extending this part of the stratigraphy 4km to the south (Figure 1). Holes RC-17-21 and RC-17-25 returned 1.24 g/t Au over 8.0m and 1.79 g/t Au over 6.0m, respectively, while the balance of the results returned relatively narrow widths and modest grades. Savary plans to conduct follow-up drilling in the vicinity of hole RC-17-019.


Resource growth potential continues to be a likely catalyst. Savary currently trades at a discount to peers (C$23/oz vs. peers at C$37/oz), suggesting that Karankasso’s likely resource growth is not yet priced into the stock. In our view, further results from the ongoing 10km drill program and the resource update expected in H2 2017 are likely to benefit Savary’s share price. As well, Sarama currently trades at C$14/oz, suggesting Sarama’s interest in Karankasso is not fully reflected in the share price.


Derek Macpherson | VP Mining Analysis
Sunneva Bernhardsdottir | Associate, Mining Analysis
Victoria Ellis Hayes | Associate
 
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Sarama Resource Ltd. - TSXV:SWA - 2, 3, 4
Savary Gold Corp. - TSXV:SCA - 3, 4, 6, 7

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