Medgold hunts for gold in Serbia with Fortuna Silver

Geologists at Medgold Resources and Fortuna Silver Mines’ Tlamino gold project in southeast Serbia. Credit: Medgold Resources.

Medgold Resources (TSXV: MED; US-OTC: MGLDF) is wrapping up a nearly 5,000-metre exploration program at its Tlamino gold-silver-lead-zinc project in southern Serbia that partner Fortuna Silver Mines (TSX: FVI; NYSE: FSM) is funding.

Fortuna extended the 2,400-metre program based on early results, including 13.4 metres from 42 metres downhole grading 5.06 grams gold, 109 grams silver, 1.44% lead and 2.85% zinc.

Geologists work on Medgold’s Tlamino project in Serbia. Credit: Medgold Resources.

The two companies also cut 38.2 metres from 19.8 metres grading 3.98 grams gold, 158 grams silver, 0.21% lead and 0.45% zinc, with a 6.9-metre interval from 48.2 metres downhole at 13.49 grams gold and 788 grams silver.

Medgold shifted its focus to Serbia in 2016 after spending a few years and €4 million looking for gold in Portugal. It found some, but not enough, working with Centerra Gold (TSX: CG; US-OTC: CAGDF) on two projects — Boticas-Chaves — that never became economic.

“If something’s not working you have to be able to stand up and say it’s not working,” Medgold president Daniel James says in an interview with The Northern Miner.

Medgold generated projects in Serbia using historical work done in the 1950s by Yugoslavian state companies as a guide. James says those companies had performed quality mapping and mineral exploration, assaying for nearly everything except gold.

“We thought that there was an opportunity to come into Serbia using the lead-zinc mineralization as a bit of a vector,” he says.

When Medgold took its own rock-chip samples, the first three all graded higher than 10 grams gold, with one in the 30s and one in the 20s. Medgold carried out channel sampling, induced-polarization geophysical surveying and mapping, and determined the mineralization is flat lying. That discovery outcrop later became the Tlamino gold project.

At the same time, the company formed a strategic alliance with Fortuna. Both companies share a chairman, Simon Ridgway, who is also Medgold’s CEO.

Fortuna invested $3 million in Medgold across two $1.5-million installments to own nearly 24% of the company. It then entered an option agreement in March 2017 that grants it the right to earn a 70% interest in Tlamino by spending US$8 million on the project, and completing a preliminary economic assessment. It can earn a 51% interest in the project by spending US$3 million over three years.

Exploration at Tlamino now operates under a three-person technical committee. Fortuna holds two seats on the committee, while Medgold does everything on the ground.


Workers at Medgold Resources and Fortuna Silver Mines’ Tlamino gold project in southeast Serbia. Credit: Medgold Resources.

Dundee Precious Metals (TSX: DPM; US-OTC: DPMLF) had explored the area previously, digging a few trenches and drilling a couple holes. It dropped the project after failing to hit mineralization at depth.

“The reason they didn’t is because it’s flat lying,” James says. “They then walked away in about 2007–2008, and we were able to see the drill core and reinterpret that, and appreciated that it was flat lying.”

Medgold says it has found a large, intermediate-sulphidation epithermal system. It lies flat up to 100 metres thick. Medgold is focused on a higher-grade zone it says is up to 30 metres thick.

This year Medgold and Fortuna have drilled a little over 4,000 metres at Tlamino. Medgold completed its initial drill campaign at the project’s Barje zone between May and July 2018, drilling seven holes. Phase two began in late July.

With four holes left in the program, the two companies will stop just shy of 5,000 metres in November, when snowy weather conditions end their field season. Medgold says it intends to come back in April and continue drilling.

Medgold will soon break for the winter but plans to resume exploring in spring 2019. Credit: Medgold Resources.

Right now the companies are drilling two holes in the Liska zone, just south of Barje. Liska lies in the same mineralization zone as Barje, but is much more lead-zinc rich — which doesn’t come as a surprise, considering the Yugoslavian explorers reported it as one of the region’s lead-zinc occurrences.

Still, James says Medgold may be part of the same gold system as Barje.

Although it focused on Tlamino mid-year, Medgold also collected 1,000 soil samples from its Ljubata gold project, 30 km northwest, and on the other side of a mountain range.

Ljubata is made up of three exploration licences that total 300 square kilometres. Two exploration licences comprise the Tlamino, Donje Tlamino and Surlica-Dukat projects. Both are 100 square kilometres. Donje Tlamino hosts Barje and Liska.

The five exploration licences cover 500 sq. km of an area called the “Crnook Dome” in the Serbo-Macedonian Massif belt of metamorphic rocks that run north to south through Serbia and into Macedonia, Bulgaria and Greece.

The company is following the same detachment structure — a ring around the Crnook Dome — from the Barje zone, 8 km west to its Karamanica zone, then north in a clockwise motion to Ljubata West, followed by Ljubata North.

The company is carrying out a geophysical survey on Karamanica as part of a 40 km program. It has taken rock-chip samples as well and says the 2 km by 2 km soil anomaly indicates a high-angle zone of polymetallic mineralization.

The leases are located near the borders of Bulgaria and Macedonia, five hours south of the capital, Belgrade, and close to the town of Bosilegrad.

Shares of Medgold are trading at 29¢ in a 52-week range of 14¢ to 51¢. The company has a $26-million market capitalization.

It’s proposing a $1-million private placement to raise money to explore Ljubata.

“By the middle of next year we should have a good idea of what we’re dealing with,” James says.

This story was written by Richard Quarisa and it first appeared in the print edition of The Northern Miner, volume 104 number 23 november 12 – 25, 2018.