Junior Explorer Reaches Critical Exploration Stage

Peter Epstein of Epstein Research examines the latest news from X-Terra Resources, including two imminent drill programs he believes "could be game-changers."

X-Terra Resources Inc. (XTT:TSX.V; XTRRF:OTCMKTS; XTR:FSE) has been flying under the radar, but critical events culminating in two imminent drill programs are coming to fruition. Add to that the fact that the current gold price is like rocket fuel. A strong gold property or project at $1,261/ounce (average price from 2014-2019) is spectacular at $1,916/ounce (oz).

Companies that were able to assemble and keep gold assets between 2014 2019 are in good shape now. Management teams skillful enough to have meaningfully advanced projects have seen their share prices soar Canadian companies like Great Bear Resources Ltd. (GBR:TSX.V; GTBDF:OTCQX), Kirkland Lake Gold Inc. (KL:TSX; KL:NYSE), Skeena Resources Ltd (SKE:TSX.V) and Victoria Gold Corp. (VGCX:TSX; VITFF:OTCMKTS).

X-Terra's share price has bounced nicely off of a COVID-19-induced selloff in March, but remains at the same level it was 18 months ago. This, despite having not one, but two, high-impact, fully funded drill programs (with no correlation to each other) starting in the next two months.

Grog and Northwest (NB on map)

The company secured an option to earn a 70% interest in the Grog and Northwest properties, (covering ~245 square kilometers [sq. km]), in April 2019 when the gold price was approx. $1,280/oz. The company's other primary asset, Troilus East, was secured in Q4/2015, when gold was briefly under $1,100/oz. More on Troilus East later; first the recent important news on Grog and Northwest.

X-Terra is earning into a 70% interest in the Grog property and the Northwest property group, (comprising the former Rim, Dome and Bonanza properties) in northwestern New Brunswick, Canada. The company completed due diligence on the properties, confirming the potential for a large disseminated gold system at Grog.

The highest gold values from historical samples were at Northwest, including 1,205 g/t, 150 g/t and 50.6 g/t gold at the Rim, Bonanza and Dome showings, respectively. The technical team also sampled the Rim vein at regular intervals over 19.9 meters, returning an average of 125.4 g/t gold of nine surface samples.

In 2012, a 16-tonne bulk sample of the Bonanza vein reportedly averaged 24.4 g/t gold (~$1,500/tonne in-situ gold value at spot price).

On Sept. 21, X-Terra announced the results of geochemical sampling and additional induced polarization (IP) ground geophysics, further validating targets for their second drill program on the Grog and Northwest properties. These results and other recent fieldwork is also helping facilitate first-ever drilling at the high-grade Rim vein target.

This important news comes after a new gold-bearing structure was discovered on the Grog property in May. Hole GRG-20-012 identified mineralization over a notable width, the headline interval was 0.46 g/t gold over 31 meters (31m), including 7.6 g/t over 0.6m, at a vertical depth of 81m. The ~1,500m drilled covered only a small fraction of the target. Hitting this significant, shallow mineralized zone was an important milestone.

According to the press release, "While the combination of gold results from the new survey to that of the survey completed in 2017 is somewhat incompatible for gold, due to the different methodologies applied, the combination of other indicators like arsenic and antimony (As, Sb) fit not only with bedrock structures mapped in the field but also with the geophysics. When all is taken into account, the overall Grog footprint now extends 5 km north-south by 2 km east-west."

Michael Ferreira, president and CEO, stated, "The correlation obtained during this phase of work between low mag, high resistivity and gold-arsenic-anomaly at the margin is a significant step up in our understanding of the Grog system. Not only was the kilometric strike length of the known gold system reached and confirmed by a common signature, our hypothesis was validated that there are two parallel trends of the same orientation and thickness."

The considerable amount of work done at Grog and Northwest points to one thing a larger drill program! Originally, 11 holes were planned. Now, management will drill 20 (16 at Grog [150-300m depth] + four 100m holes at the high-grade Rim target).

High-grade Rim vein at Northwest to see first-ever drilling

Excitement over the Rim target is growing by the day. If any of the four holes intersect meaningful high-grade mineralization, that would open up not just Rim, but other Northwest showings to high priority drilling later this year.

The Rim vein showing on the Northwest property group has been targeted for a maiden drill test. Chip sampling in 2018 returned from 4.5 g/t to 1,205 g/t gold. The drill plan includes four shallow holes of 100m each to test the down dip projection of soil anomalies and identify additional gold-bearing veins.

Troilus East project borders industry darling Troilus Gold

Switching gears, X-Terra's other primary project, Troilus East, is shown in the map above. The property is situated in north-central Quebec, about 160 kilometers northeast of Chibougamau, in the Frotet-Evans greenstone belt and comprises 182 mining claims covering ~93 sq. km.

The Frotet-Evans belt has seen limited exploration compared to the Abitibi greenstone belt. X-Terra's footprint, in yellow, borders Troilus Gold's project, and is