New Gold (TSX:NGD) is throwing $20 million into the ground near Prince George this summer.
The Vancouver-based company announced plans Wednesday to sink drills into the ground at its recently acquired Blackwater gold project.
The program comes two weeks after the company closed a $513 million deal to acquire Richfield Ventures, which owned Blackwater.
The project, located 160 kilometres southwest of Prince George, contains 1.8 million ounces of gold in an indicated category.
New Gold said the $20 million program would target 40,000 to 50,000 metres of drilling in the second half of 2011.
That means New Gold has more than doubled Richfield’s original drilling target for 2011, all in an effort to see just how much treasure lies in the ground beneath Blackwater.
“The holes drilled since the March 2011 resource estimate have shown good continuity and we look forward to building upon these successful results to grow the Blackwater resource,” said Mark Petersen, New Gold’s vice-president of exploration.
New Gold’s drilling activity comes at a time when mining companies are using high commodity prices to bankroll exploration programs throughout B.C.
As well, New Gold is in the midst of building its New Afton gold project near Kamloops. That mine is expected to come online in 2012.
At press time, New Gold’s shares were valued at $8.86. The price per ounce of gold was up $1.80 on Wednesday to $1,525.
Joel McKay