Shares of Freyja Resources (CVE:FRA) surged over 25% on Thursday after the company announced the results from its initial sampling program completed last year on its Las Cristinas copper-silver project, which it is planning to take to production by the end of 2014.
The channel sampling program, which focused on the southern end of the Mexican property, comes ahead of a planned 3,000 metre drilling program at the site, which is expected to begin in March following the receipt of necessary permits.
Of the highlights, the company returned grades as high as 17.95% copper and 429 grams per tonne (g/t) of silver from the samples. Freyja said 64 samples from the southern end of the asset delivered 1.697% copper and 10 g/t silver, including 41 samples within a 30-metre section grading 2.45% copper and 11 g/t silver.
The results also included a nine-metre channel sample grading 2.9% copper and 105 g/t silver, and a six-metre section on surface with over 5% copper and 20 g/t silver. The channel sampling program consisted of more than 333 samples ranging from 3 to 5 kilograms per sample.
The Las Cristinas area is approximately 1.3 km long, by 20 to 50 metres wide, with the sampling program focused on a 550-metre long section split between two zones known as the South and North Mounts. The southern end of the property, which will also be the focus of the upcoming drill program, was the host of small scale copper production in the early 1970s and also holds underground workings and several drifts and adits. All current access roads to the project are also located at this southern end.
The company said Thursday the results of the sampling program suggest a true width of the mineralized zone on the South and North Mounts, and the southern extension, to be about 30 metres wide, while the northern extension to be roughly 50 metres wide.
The results from our extensive sampling program of the Las Cristinas Area are consistent with historical results from the Las Cristinas property,” said president and CEO Andre St-Michel, who is a 30-year veteran of the mining industry, having resided the last 10 years in Chihuahua City, which is located about 200 km from Las Cristinas.
“They give us a clear indication of how we need to plan the next phase of our exploration program, which will consist of over 3,000 meters of drilling. We hope to complete this drilling program by the end of June. We will continue to focus on the Southern section of the property with a view of better delineating our production targets.
The company’s goal is to start initial production by the end of this year, generating cash flow to then fund a more in-depth exploration program. The main aim of the 3,000 metre drilling program will be to delineate the initial open pit production area within the 550-metre mineralized section, and to test the southern extension for the potential to expand the mineralized corridor.
Freyja said that metallurgical and lixiviation tests to help determine recovery rates are currently being conducted, which will provide cost indications. Following the drilling campaign, the company is planning to build a heap leach pad on site.
Earlier this month, the company announced plans to raise up to $1.1 million through two separate financings, with the funds to be used to develop its Las Cristinas project, which holds four adjacent exploration concessions that stretch across 683 hectares in northeast Mexico.
The Montreal, Quebec-based company said it signed a share exchange agreement with Global Resources Investment, while it is also planning to complete a private placement of up to 850,000 units at a price of 17 cents each.
Freyja’s stock soared 25.8% on Thursday afternoon, sitting at 19.5 Canadian cents just hours after the channel sampling results were released. The gains stretched the company’s year-to-date rise to more than 62%.