Gascoyne Resources (ASX:GCY) shares are currently trading about...

Gascoyne Resources (ASX:GCY) shares are currently trading about 40% higher than they were at the beginning of the week thanks to a batch of encouraging gold hits at the company’s Dalgaranga project in Western Australia.

Gascoyne shares were last trading at A$0.105 versus a range of $0.075 to $0.08 maintained since the start of September.

The stock spiked 65%, however, to a A$0.14 close yesterday with confirmation of the extension of mineralisation beyond current resource wireframes at Dalgaranga’s Gilbeys deposit.

The update was highlighted by new drilling results, including 5 metres at 5.6g/t gold from 51 metres within a 13-metre intersection grading 2.7g/t gold from 46 metres.

Other holes marked 21 metres at 1.5g/t gold from 191 metres (including 10 metres at 2.1 g/t gold),15 metres at 1.5 g/t gold from 106 metres and 3 metres at 4.0 g/t gold from 33 metres.

Mineralisation in the area remains open down dip and to the south.

The new drilling data – along with upcoming results from a recently completed diamond drilling campaign – will be incorporated into a revised resource estimate by the end of October, which will in turn form the basis for the current prefeasibility study.

Dalgaranga is located about 65 kilometres by road from Mt Magnet in WA’s Murchison gold mining region of and covers the majority of the Dalgaranga greenstone belt. From 1996 to 2000, the project produced 229,000 ounces of gold with reported cash costs of less than $350 per ounce.

It contained a remnant JORC resource totalling 14.1 million tonnes grading 1.7g/t gold for 756,000 ounces of contained gold.