Shares in S2 Resources dropped 17.4 per cent on Tuesday after the junior gold and base metals explorer said it didn’t hit “significant gold” in recent drilling at its Pluto project in Nevada.

S2 (ASX:S2R) received assays from four holes drilled in October and November last year as part of its initial “proof of concept” program. However, the results showed no significant gold was intersected.

Shares slipped to an intra-day low of 19c before recovering slightly to close the day out at 20c.

S2R shares over the past six months. Source:
S2R shares over the past six months. Source:

During the September quarter, S2 entered into an agreement with TSX Venture Exchange-listed Renaissance Gold to earn-in to three properties located on some of the major known gold mineralised trends in Nevada.

The Pluto project, in which S2 can earn an up to 70 per cent stake, is located on the North-South “Rabbit trend” of gold deposits.

Recent drilling was testing for the presence of favourable host rocks, particularly a limestone-bearing unit known as the Antler sequence, rather than to necessarily directly detect mineralization.

The Antler Formation hosts several large gold deposits in the Battle Mountain and Getchell districts 90 kilometres to the North.

While the four holes intersected a thick sequence of Havallah Formation mudstones, considered to form the hangingwall seal to the more favoured Antler sequence host-rocks, no obvious Antler sequence rocks were intersected, S2 noted.

The company plans to review the results in early January prior to any further work being undertaken at Pluto.

Meanwhile, planning is now underway for drilling at the South Roberts and Ecru projects, which S2 can also earn a 70 per cent stake in.

The South Roberts project is located on the Battle Mountain–Eureka trend and on the western margin of the Northern Nevada rift in a very similar setting to Barrick Gold’s 12 million ounce Goldrush deposit to the North.

The Ecru project is also located on the Battle Mountain–Eureka trend. The project is bordered on three sides by Barrick’s Cortez District property, which contains the Pipeline, Cortez Hills and Goldrush deposits that collectively host around 50 million ounces of gold.

Drilling is expected to start in April.

S2 was unavailable for comment.