Coastal Gold reports 134,500 Oz of Gold in old Tailings
Upgrading the tailings to an Indicated Resource will be more difficult since the rocks are not “in-place” and a geologic model showing continuity or consistency of grade cannot really be applied. Essentially, they will have to infill previous drill results with much more closely spaced holes.
TORONTO, ONTARIO–(Marketwired – Jan. 20, 2014) – COASTAL GOLD CORP. (TSX VENTURE:COD)(FRANKFURT:CY41) (the “Company”)has filed a National Instrument 43-101 (“NI 43-101”) compliant technical report related to its press release issued on December 4, 2013 announcing a further update to its mineral resource estimate for the Hope Brook Gold Project in southwest Newfoundland and its press release on January 16, 2014 announcing a mineral resource estimate for the tailings at Hope Brook.
When we last ran across Coastal Gold, they had just published the results of a vibracore drilling program designed to establish a mineral resource in the tailings ponds of the Hope Brook deposit in southwest Newfoundland. The Hope Brook mine operated from 1987-1997, but the deposit was not mined out and a significant quantity of gold and copper was left behind in the mine tailings. It’s no wonder: At the end of 1997 when the mine closed, the price of gold was under $300 US and copper less than $1.00 per lb.
Coastal is now reporting that a NI 43-101 compliant technical report has been filed for the deposit including both Inferred and Indicated Resources.
The independent technical report, entitled “2013 Mineral Resource Estimate, Technical Report, Hope Brook Gold Project, Newfoundland and Labrador, Canada” (the “Technical Report”), dated January 20th, 2014, was prepared for Coastal Gold by AGP Mining Consultants Inc. and Mercator Geological Services Limited. The Technical Report is available under the Company’s profile on SEDAR.
Although the website itself can be a bit cumbersome to manoeuvre, Technical Reports posted on SEDAR (System for Electronic Document Analysis and Retrieval at www.sedar.com) can be a useful source of information on public mining company activities. The PDF reports include more detailed information on history, geology, metallurgy, resource estimates and other information that can’t be reasonably included on a news release.
Dr. Bill Pearson, P.Geo., President & CEO of Coastal Gold, commented: “We are delighted with the results of this mineral resource update, which not only significantly increased estimated resource ounces in the indicated category but also substantially increased the overall grades of the resource. The tailings resource is an important addition and is being considered in the preliminary economic assessment in progress.”
The NI 43-101 mineral resource on the Company’s Hope Brook Gold Project, as reported in the press release issued on December 4th 2013, are estimated to contain 1,239,000 indicated ounces of gold and 138,000 inferred ounces of gold as set out in Table 1 below.
|Table 1: Mineral Resource for Gold, Hope Brook Gold Project as at December 4, 2013|
|Within constraining shell
@ 0.50 g Au/t cut-off
|Below constraining shell
@ 2.0 g Au/t cut-off
According to the technical report, the company is assuming a 0.5 g/t cut-off for the potential open-pit resource and 2.0 g/t for the potential underground resource with an 86% gold recovery and a base gold price of US $1,400/oz. Those economics sound a bit tight for my liking, but it’s too early to say for sure.
All resource estimates are a “best guess” based on available data. An inferred resource represents the lowest level of confidence in the reported results and is based on limited information, while an indicated resource is a more confident estimate based on more data. In this case the difference between the Inferred and Indicated resource is essentially drill-hole spacing: The more closely spaced drill holes have allowed the company to more confidently estimate the grade and continuity of the resource.
Additionally, a NI 43-101 mineral resource estimate has also been reported on the Tailings at the Hope Brook project as reported in the press release dated January 16th, 2014. The tailings are estimated to contain 134,500 ounces of gold and 9.5 million pounds of copper at a cut-off grade of 0.45 g Au/t as set out in Table 2.
|Table 2: *Mineral Resource for Gold and Copper, Hope Brook Tailings as at
January 16, 2014
|Inferred||Tailings Pond 1||2.6||0.95||0.10||80,000||5.9|
|Inferred||Tailings Pond 2||2.3||0.75||0.07||54,400||3.6|
|Inferred||Pond 1 and Pond 2 Total||4.9||0.86||0.09||134,500||9.5|
|* Resource cut-off is 0.45 g Au/t|
For the tailings ponds, the company is using a lower cut-off of 0.45 g/t gold. Upgrading the tailings to an Indicated Resource will be more difficult since the rocks are not “in-place” and a geologic model showing continuity or consistency of grade cannot really be applied. Essentially, they will have to infill previous drill results with much more closely spaced holes.
ABOUT COASTAL GOLD
Coastal Gold is a Canadian mineral exploration company listed on the TSX Venture Exchange under the symbol “COD”. Coastal Gold’s flag ship property is the Hope Brook Gold Project located in southwestern Newfoundland, which has 19.9 million tonnes at 1.93 g Au/t for 1,239,000 ounces of indicated mineral resources and 1.3 million tonnes at 3.22 g Au/t for 138,000 ounces of inferred mineral resources. In addition, there are inferred mineral resources in the tailings of 4.9 million tonnes at 0.85 g Au/t and 0.09% copper containing 134,500 ounces of gold and 9.5 million pounds of copper. Coastal Gold is currently completing a Preliminary Economic Assessment (PEA) on the Hope Brook Gold Project.
The company is currently working on a Preliminary Economic Assessment (PEA). A PEA is the pre-cursor to a Pre-feasibility study. Pre-feasibility studies are generally required (at a minimum) in order to upgrade a Mineral Resource to a Mineral Reserve. For the next phases of development the company is proposing a two-phase, two-year exploration and evaluation program that will cost about $10 million CDN.
David Copeland, P.Geo., Chief Geologist, and Dr. Bill Pearson, P.Geo., President & CEO of Coastal Gold, both Qualified Persons as defined by NI 43-101, have reviewed and approved the scientific and technical content of this news release. Pierre Desautels, P.Geo., Principal Resource Geologist, and Jay Melnyk, P.Eng., Principal Mining Engineer, both of AGP Mining Consultants and Qualified Persons under NI 43-101 who are independent of the Company, have prepared and authorized the release of the mineral resource estimates presented herein. Both the diamond drill hole database and the vibracore drill hole database developed by Coastal Gold were reviewed and validated by Michael Cullen, P.Geo., of Mercator Geological Services, a Qualified Person as defined under NI 43-101 who is independent of the Company.