Mega Precious Metals (MGP.V) has released the results of a long-awaited resource estimate on its Monument Bay gold-tungsten project in Manitoba, Canada. We are positively surprised by this update as a pit-constrained resource estimate at Twin Lakes outlines a total of almost 2.7 million ounces of gold and 350,000 mtu tungsten. The average grade is very decent at in excess of 1.5g/t for the gold zones and 0.175% WO3, translating into a rock value of roughly $120/t. This update is the outcome of a 13,500 meter infill drill program.
More importantly, MGP has also outlined a potential high-grade starter pit which contains almost 1.4 million ounces at a grade of roughly 2.75g/t, which should be viable even at the current low gold price. This seems to be just the beginning as only 1/4th of the old core assays has been sampled for tungsten, so we believe it’s a reasonable assumption that Mega Precious Metals will eventually end up with in excess of 1 million metric tonne units of tungsten, which would be a very interesting by-product credit for its gold production. MGP is trading at just $0.085 after a free fall from C$0.90 in the summer of 2011. The company has recently raised in excess of C$5M at a 40% higher share price.
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Disclosure: The author holds no position in Mega Precious Metals (yet). Please see our disclaimer for current positions.
