Strategic Minerals (ASX:SMC) has released the results of a JORC-compliant resource estimate completed by an external consultant. The Big Vein South and Central zones of the Woolgar Gold Project in Queensland, Australia now contain just over 425,000 ounces of gold at an average grade of 2.14 g/t gold. The geological interpretation of the mineralized structures has also changed now as the system seems to be more continuous than originally thought.
This should reduce the future costs associated with exploring the property (as more holes will hit the intended targets), and should ensure the company will meet its exploration target of 0.5-1Moz at 1.8-2.2 g/t. Looking at the sensitivity analysis of the resource estimate, the resource seems to remain quite stable. Even if you’d apply a 1g/t cutoff grade, the total amount of ounces would be reduced just marginally to 400,000 as the increase of the average grade to 2.5 g/t gold compensates for the loss in tonnage.
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Disclosure: The author holds no position in Strategic Minerals. Please see our disclaimer for current positions.
