"massive quartz veins", "mineralization of each zone is excellent" "good potential to significantly increase current drilled resources" Enough said!
Orientfrance. Massive quartz veins does not mean the veins are massive or the quartz within the vein is massive. It has to do with the rapid rate that fluid passed through the vein. The vein widths in todays results are modest at best.
"mineralization of each zone is excellent" these types of veins are often fairly predictable in that they are generally all mineralised with the same metals in this case gold. However as we can see from the average grade the actual average grade is low and the volumes are small.
"good potential to significantly increase current drilled resources" As you would expect them to say but given the results so far I doubt they would actually spend more money on this ground as it is marginal at best.
The continuity of mineralisation in each zone is excellent and grade distribution does not display a high nugget effect, and along with mapping and trench sampling this currently suggests that a drill spacing of 100m x 50m is considered sufficient for the estimation of an Inferred Resource, 50m x 50m for an Indicated Resource and 25m x 25m for a Measured Resource.
Within the area drilled to date and also within a conceptual shallow open cut pit shell to 40-60m below surface, a preliminary first pass estimate of a combined mineralised zone of approximately >90,000oz Au can be calculated at an average grade of 1.25g/t Au, using a 0.2g/t Au cut-off. This is a very preliminary estimate only and is not a JORC compliant resource at this stage.
There is very good potential to significantly increase the current drilled resources, as the mineralisation is open along strike, to the north and south in all three zones. Given the aerial extent of the mapped veins in the Licence area, a target in excess of 200,000oz Au is considered to be a plausible estimate.
Drilling has been paused to evaluate the potential of the drilled area and to perform further investigations whether a "pilot" heap leach mining operation would be beneficial at this stage.
Initial internal scoping studies using local labour, power and mining costs, suggest that a "minimum pilot" deposit size, amenable to gold extraction by heap leach, of 80,000oz to 100,000oz at 1.2g/t to 1.3g/t Au would have a cash operating cost of $640/oz Au, require an estimated $12-14 million of capital expenditure and generate a cash operating profit of $80 million over a 4 year mine life.
Nice update, we finally have some initial figures to work with! Recovery levels are low however. Not sure the market will be impressed until a JORC resource is released... I do think the 90koz is a conservative estimate though
Current market is sell on news so expecting a retrace to 3.6 level imo
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