Savary Gold Corp (TSXV:SCA) announced additional results from its completed ~9,500m drill program at the Karankasso JV project (69.5% SCA/30.5% SWA)
in Burkina Faso. The second batch of results comprised of 41 holes over 4,489m which focused on resource expansion at the Diosso South, Karangosso
and West Trend areas. The company plans to begin an 8,000m (80 holes) phase 3 drill program in early May to follow-up on phase 2 results as well as
test additional targets identified by auger drilling. We believe continued success from the drill programs at Karankasso along with the resource update
expected in H2 2017 should benefit the company’s share price, as results continue to demonstrate resource growth potential. Savary currently trades
at a discount to peers (C$23/oz vs. peers at C$44/oz).
Diosso South and West Trend areas demonstrate resource growth potential (Figure 1).
15 holes over 1,497m were drilled at the Diosso South
Area, successfully identifying mineralization north and south of the known mineral resource estimate, the trend remains open along strike to the north,
south and at depth. Follow-up drilling will be completed during phase 3. At the West Trend area, 9 holes over 1,137m were drilled to test the limits
of the current inferred resources and possible extension north of the West Trend. Results were highlighted by the delineation of 3 mineralized lenses
in a 300m long by 100m wide area to a depth of 100m. Drilling at Karangosso returned less favourable results (11 holes over 1,094m), noting drilling
complications and lack of significant mineralization. Additional results from Serakoro 1 Main area included a new intercept of 2.05 g/t over 5m, the
company is planning on further drilling the area to determine continuity of the mineralization.
Phase 3 drilling likely to help close the valuation gap to peers.
Phase 2 of the program is now complete with the remaining results
from Kueredougou West and S-Nosa Zone still pending. The company plans to begin an 80 hole, 8,000m phase 3 program in early May, which will follow-up
on results from the phase 2 program at Diosso South, West Trend, Kueredougou, Serakoro Main and Serakoro West zones and test additional targets identified
by auger drilling. Savary currently trades at a discount to peers (C$23/oz vs. peers at C$44/oz), in our view results from the phase 2 and phase 3
programs at Karankasso along with the expected resource update in H2 2017 should benefit Savary’s share price, as results continue to support resource
Derek Macpherson | VP 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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