Columbus Gold (CGT.TO) has published a maiden resource estimate on its Eastside gold-silver project in Nevada. Using a cut-off grade of 0.15 g/t gold, the total resource contains 654,000 ounces of gold at an average grade of 0.57 g/t, and just short of 4 million ounces of silver at an average grade of 3.5 g/t silver.
It’s important to realize the resource estimate is pit-constrained, which makes it so much more valuable rather than just another resource estimate which didn’t take any potential pit shells into account. That’s confirmed by the company, as CEO Giustra said just half of the total amount of mineralized material has been included in this resource estimate, so whilst the 721,000 gold-equivalent ounces are a bit below our expectations of 1 million ounces, we aren’t unhappy, as the quality of the ounces is higher than we expected. On top of that, the resource seems to be quite robust. If you would increase the cut-off grade from 0.15 g/t to 0.30 g/t, you would lose almost half the total tonnage, but the average grade is approximately 60% higher, resulting in a loss of just 109,000 ounces gold (-16%), which is really good.
We don’t care too much about the silver, as previous metallurgical test work has indicated the recovery rate of the silver will remain limited to 20-50%, but as previous gold recovery rates were estimated at 70-90%, Columbus Gold might be sitting on something substantial here, as this specific zone at Eastside remains open at depth, to the south and the west.
The company is clearly encouraged, and has now unveiled its plans to deal with the other 57 square kilometers at Eastside (the 721,000 gold-equivalent ounces were based on just one simple square kilometer land package).
No less than six geochemical targets as well as one geophysical target have been encountered along strike of the existing resource estimate, and if the company’s geo’s hunch is right, it could be easy to double the total resources at the original drill target.
Columbus Gold has already filed its updated technical report on Eastside (which is something we really appreciate, as most companies need the entire 45 days to file the definitive report), and we will provide you with a more in-depth update on this resource estimate shortly. We expect 2017 to be a very important year for Columbus Gold, on both the French Guiana and Nevada fronts.
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The author has a long position in Columbus Gold. Columbus is a sponsor of the website. Please read the disclaimer
