Megado Gold reports historic 2km-long gold anomaly in Ethiopia, drilling next week

Recently listed Megado Gold (ASX: MEG) reports it now has records that historic sampling in the 1990s at its Babicho gold project in Ethiopia delineated a “coherent and highly significant” 2km-long gold-in-soil anomaly.

This anomaly coincides with a major north-south trending shear zone that hosts the Lega Dembi and Sakaro gold deposits (with more than 3 million ounces between them).

A maiden drilling program will begin at Babicho next week.

The company says that, within the 2km anomaly, preliminary work has included only four trenches and four shallow drill holes.

The trenching returned a top assay of 1m at 35.3 grams per tonne gold, with other samples coming in with 10m at 3.5g/t and 1m at 24.8g/t.

Evidence of artisanal workings and visible gold

Megado’s geologists have continued to confirm strong evidence of artisanal workings and indications of “significant” occurrences of primary hard rock gold.

The release also notes that visible coarse gold panned at Babicho confirms its free-milling gold potential.

In October, Megado raised $6 million through its initial public offering.

Megado’s granted projects cover 511 square kilometres, with a licence application to add another 227 sq km.

All the Megado projects are located on the Arabian-Nubian Shield, which is host to active mines and gold occurrences.

The company’s focus is on Ethiopia’s greenstone belts which have seen minimal modern exploration.

The gold belt targeted by Megado was prospected between 1979 and 1982 by the state mineral resources agency. This identified a number of primary and placer gold targets.

Chief executive officer Michael Gumbley said he was thrilled with the in-country team in Ethiopia.

“Megado’s six full-time geologists have successfully accelerated [our] exploration program such that our initial Babicho drilling campaign will begin next week,” he added.

Previous explorers ‘misinterpreted geology’

Trenching and sampling is continuing with those samples being submitted to a laboratory.

“Importantly for Megado, the current geological mapping and sampling programs have delivered a far deeper understanding of the local geology,” said Mr Gumbley.

There have confirmed the company’s thesis that Babicho is a highly productive asset,” he added.

Mr Gumbley also noted that, while historical exploration programs produced extremely encouraging results and high gold grades, he believes that previous companies misinterpreted the geology and the structural controls to the gold mineralisation.

However, the local team used their extensive knowledge of the area to inform the company’s strategy for the drilling program.