Orca Gold (ORG.V) announced an updated resource estimate on its Galat Sufar South prospect at its Block 14 license in Sudan. Using a cutoff grade of 1g/t, the total resource estimate contains approximately 1.7 million ounces of gold at an average grade of 1.85g/t. If we lower the cutoff grade to 0.5g/t, the total resource increases to 2.45 million ounces of gold at an average grade of 1.22g/t which is still very decent as 90% of the resources in the indicated category are within 100 meters from surface which means the deposit will be an open pit mine.
Approximately 300,000 ounces are oxides grading 1.9g/t and should be amenable for heap leaching, and it would be interesting to see economics on this project using a small heap leach operation in the first few years which could fund the capital expenditures to recover the remaining ounces.
Metallurgical test work on the project is already encouraging, as recoveries between 79% and 95% were obtained. Further work is obviously necessary, but we’re very encouraged by these preliminary results. But even though everything looks good, investors should be aware of the potential geopolitical problems in Sudan, even though Orca Gold has been working there for the past three years.
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Disclosure: The author holds no position in Orca Gold. Please see our disclaimer for current positions.
