We’ve covered the Magino Gold Project about 2.5 years ago, when it was a 1.5Moz deposit owned by Golden Goose Resources Inc. Later on, Golden Goose merged with Kodiak Exploration Ltd., and the combined entity continued as Prodigy Gold Inc. (PDG.V). Today Prodigy announced an updated resource estimate on the Magino-project, with over 5.8Moz in the Indicated category. This means in less than 3 years, the total resource estimate quadrupled to 6.1Moz gold at an average grade of 0.89g/t.
We are now looking forward to the PFS, and expect an NPV8% of over 1B, based on a $1200/oz gold price, which should attract senior gold miners, as Prodigy is trading at less than $30/oz in the ground.
There however is one caveat. The average grade in today’s resource update is only 0.89g/t, which is considerably lower than the 1.15g/t used in the PEA last year.
[download_link link=”http://www.prodigygold.com/_resources/news/nr_2012_08_20.pdf” target=”blank”]You can read today’s press release here (pdf).[/download_link]
Disclosure: The author holds a long position in Prodigy Gold Inc. Please see our disclaimer for current positions.
