Paramount Gold and Silver (PZG.TO, NYSEMKT:PZG) has announced the results of an updated resource estimate, which will be followed by an updated PEA in August. This PEA could be very interesting as Paramount will now also investigate the economics of a heap leach scenario on the San Antonio and San Francisco zones which could have a positive impact on the overall economics of San Miguel.
The total amount of measured and indicated ounces now is 1.12 million ounces of gold at an average grade of 0.81g/t. This average grade was greatly influenced by the Don Ese zone which shows a M&I resource of in excess of 300,000 ounces of gold at an average grade of almost 3g/t. If you’d exclude the Don Ese zone from the resource estimate, the average grade on the other zones (excluding San Antonio which is a silver zone) would be closer to 0.6-0.65g/t. The inferred resource estimate would add another 700,000 ounces of gold and almost 38 million ounces of silver to the bottom line, but the average grade here is much lower and we’re afraid some of the zones of the inferred resources won’t be profitable at the current gold and silver price.
We are looking forward to see an updated mine plan and its economics, but we aren’t expecting any miracles.
> Click here to read the press release
Disclosure: The author holds no position in Paramount Gold and Silver. Please see our disclaimer for current positions.
