Among the highlights, one hole intersected 70.1m at 2.94g/t gold and a separate 56.4m grading 2.6g/t.

The above drill hole was on the northern portion of the sulphide body where existing assay information had suggested lower grades; while a second hole in an untested area between the Central and Main pits intersected three gold zones including 57.9m at 1.3g/t.

"Based on the drill results and our exploration model, management believes the sulphide blanket beneath Florida Canyon could host a substantive high-grade ore body beneath the oxide zone," president and CEO William Howald said.

"By quantifying the sulphide mineralisation, Florida Canyon has the initial makings of a world-class ore body located in Nevada."

Rye Patch started production at the previously-mined project earlier this year and produced 2,911oz of gold and 1,626oz of silver in October, mining 35% more tonnes of ore than planned.

It expects to achieve commercial production, update the oxide resource and outline mine expansion plans in the first quarter of 2018.

Previous owner Pegasus Gold had done an internal pre-feasibility study on the sulphide mineralisation in 1996 using a gold price of US$400/oz but Rye Patch said not enough work had been done to qualify it as a resource or reserve.

The company had C$16.5 million (US$12.8 million) in its treasury at the end of October and its shares were unchanged yesterday at 21.5c.