HighGold Mining (HIGH.V) released its maiden resource estimate on the Johnson Tract deposit in Alaska. In excess of 80% of the total tonnage is already in the indicated resource category as almost 3.5 million of the 4.2 million tonnes are part of the indicated resource estimate with an average grade of 5.33 g/t gold, 6 g/t silver, 0.56% copper and 5.9% ZnPb for a gold-equivalent grade of 9.39 g/t.
The inferred resource contains just 706,000 tonnes at a much lower grade of 4.76 g/t gold-equivalent which should still be economical thanks to the good recovery rates for the metals as even zinc recovers nicely (92% in just one cleaning stage).
Even more important than the grade and resources is the geometrical model of the resource as the resource envelope is a thick subvertical deposit with the potential to be laterally developed from the valley floor for gravity-assisted mining. That’s a nice benefit, for a change.
As of the end of March, HighGold had a positive working capital position of approximately C$20M which means about 30% of the current market cap is backed by cash. That cash will likely be spent on exploration in the next eighteen months.
Disclosure: The author has no position in HighGold Mining. Please read our disclaimer.
