Challenger Exploration (CEL.AX) has completed a maiden resource calculation on its El Guayabo gold project in Ecuador. This initial resource has outlined a large but very low-grade resource of 270 million tonnes at an average grade of 0.52 g/t gold-equivalent for a total gold-equivalent resource of 4.5 million ounces.
The total resource in the pit shell (based on a gold price of $1800/oz and a cutoff grade of 0.3 g/t gold-equivalent) is 212 million tonnes at 0.50 g/t gold-equivalent for a total of 3.4 million ounces gold-equivalent. Just over 70% of the gold-equivalent grade consists of gold with the remainder contributed by silver, copper and molybdenum. There is an additional resource of 56.5 million tonnes that is located below the pit shell but at a higher cutoff grade of 0.4 g/t gold-equivalent resulting in an additional 1.1 million ounces gold-equivalent at an average grade of 0.59 g/t gold-equivalent.
The resource also contains a higher grade component with for instance 1.5 million ounces gold-equivalent at 1 g/t (using a 0.65 g/t cutoff grade), or even a 0.6Moz AuEq resource at 1.5 g/t using a cut-off grade of 1 g/t.
Interestingly, this maiden resource of 4.5 million ounces gold-equivalent borders the Lumina Gold (LUM.V) Cangrejos project. Challenger correctly points out Lumina Gold was able to sell a stream on the project (where a pre-feasibility study was recently completed) but let’s not forget the average grade is higher at Cangrejos. The 1.08 billion tonnes indicated resource at Cangrejos has an average grade of 0.48 g/t gold, 0.09% copper, 0.7 g/t silver and 18 ppm Molybdenum. On a gold-equivalent basis, that’s approximately 0.63 g/t and thus about 22% higher than Challenger’s current average grade. And that 0.11 g/t difference on a gold-equivalent basis could make a big difference when it comes to determining the viability of El Guayabo. That being said, it could be an excellent satellite deposit for Lumina Gold to keep the mill running for another decade.
Disclosure: The author has no position in Challenger Exploration. Please read our disclaimer.
