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7:30 pm Pacific

GGI Steps Out And Connects At Silver Eagle, District Potential Grows

What started as a seemingly innocent wildcat “test” hole a few months ago at Garibaldi Resources‘ (GGI, TSX-V) Rodadero Project in central Sonora State is rapidly evolving into a very intriguing near-surface, high-grade Silver and Gold play focused on a growing package of targets.

A total of nine targets are now clustered within a 30 sq. km area – eight of them, importantly, striking south, southeast and east of a now confirmed Silver Eagle discovery.  This has plenty of potential scale and Garibaldi, to its credit, is attacking this system with vigor (Phase 2 drilling is commencing immediately) even in the midst of the rainy season in Mexico.  GGI just keeps pressing on, sniffing the possibility of a second big find in that country.

From Silver Eagle in the north to La Colorado in the south, from Reales in the west to Rambo in the east, Garibaldi now has an even more compelling early-stage discovery on its hands at Rodadero following the release of additional Silver Eagle drill results and fresh regional geological data after today’s market close.  Garibaldi President and CEO Steve Regoci has agreed to our request for an interview which we expect to be able to post within the next 48-72 hours.

Below is a map of the Rodadero Project taken tonight from the GGI web site, followed by our initial “take” on tonight’s news.

1.  GGI has hit on five out of its first six holes at Silver Eagle, and mineralization is remarkably very shallow – within 50 m of surface, giving this obvious open-pit potential.  Maintaining these grades while building tonnage at this emerging deposit is now key.  Silver Eagle has excellent road and water access, and power lines run right through the target;

2.  In this business, sometimes you’re only as good as your most recent hole.  In this case, SE-14-06 – the farthest step-out from SE-14-01 – has returned the widest mineralized intercept to date (24.4 m near-surface), suggesting (along with SE-14-03) that the system at Silver Eagle is indeed widening to the south after the 7-m bonanza grade section (85 m to the north) found in SE-14-01.  SE-14-06 intersected 104 g/t Ag over 18.93 m between a depth of 27.57 m and 46.5 m;

3.  A whopping 1,935 g/t Ag (62.2 oz/t) beginning at just 4.3 m in SE-14-03 (4.3 m to 5.2 m) underscores Silver Eagle’s powerful combination of impressive grades and very shallow mineralization;

4.  Mineralization remains open in all directions but Silver Eagle to the south and the east looks particularly exciting.  It’s still early, of course, and the geometry of this system has yet to be defined;

5.  Here’s the kicker: 

“Hot spot” hyperspectral remote sensing signatures = (leads to) high-grade surface sampling results = (leads to) high-grade drill intercepts at Silver Eagle.  That has been the pattern so far.  In some cases, drill core is assaying higher than the surface samples.

Surface sampling results are in on three targets immediately east and southeast of Silver Eagle, as GGI reported tonight.  Two dozen samples out of 218 returned Silver values >200 g/t Ag (as high as 8,000 g/t) while, interestingly, 17 returned Gold values of 3 g/t or better (as high as 52.6 g/t).  Average values were 114 g/t Ag and 0.98 g/t Au.

While one has to be cautious due to the inherent biases of sampling, keep in mind that these impressive sampling numbers at Rodadero North coincide with hyperspectral data while drilling has confirmed all surface data so far at Silver Eagle.  The use of hyperspectral remote sensing data is what allowed Garibaldi to cash in on its Temoris option in Mexico in 2009 with follow-up drilling by Paramount Gold & Silver (PZG, NYSE and TSX) resulting in a very significant high-grade discovery that now contains substantial NI-43-101 resources.

No Gold values showed up in surface sampling at Silver Eagle (some minor credits in drill hole SE-14-01) but they are turning up in sampling to the east and southeast of Silver Eagle, plus high-grade Silver.  How important this could be remains to be seen, but Silver Eagle could be just the tip of the iceberg.  And there’s obviously more than just Silver at Rodadero.  The most southerly drilled hole at Silver Eagle so far (SE-14-06) encountered a 4.6-m section of 4.6% Pb.  Could it be a Silver-base metal environment on one side of Rodadero North, striking to the south-southeast from Silver Eagle, and a Silver-Gold system on the other side, also striking to the south-southeast?  We should find out soon enough.  There’s every reason to believe that this is going to get even more interesting.

With a highly capable management and geological team, Garibaldi has demonstrated repeatedly that it can move forward on different fronts at the same time.  The huge advantage with GGI is that it has not one, not two, but three first-rate projects on the go right now, and a proven track record of cost-effective exploration with the ability to convert a project into a reward for its shareholders.  There’s a high probability in our view that Rodadero, La Patilla and the Grizzly will generate some magical moments for GGI in the days, weeks and months to come.  It’s refreshing to see a success story.