TORONTO (miningweekly.com) – Precious metals explorer Newstrike Capital late on Wednesday reported a maiden Canadian National Instrument 43-101-compliant resource for its flagship Ana Paula project, located in Guerrero state, Mexico.
The resource estimate, developed by Independent Mineral Consultants of Tucson, Arizona, estimated the measured and indicated resource to contain 43-million tons of ore grading 1.63 g/t, resulting in about 2.26-million contained gold-equivalent ounces, which comprised of 2.2-million ounces at 1.59 g/t of gold and 9.7-million ounces of contained silver at grades of 7 g/t silver.
The inferred resource was estimated at 1.8-million tons of ore grading 0.89 g/t, containing a possible 60 000 gold-equivalent ounces, comprised of 50 000 oz of gold grading 0.78 g/t and 1.1-million ounces of silver grading 18.7 g/t.
The company used a cutoff grade of 0.45 g/t gold equivalent.
The reported estimates assumed a long-term gold price of $1 450/oz and a silver price of $28/oz.
The resource estimate was based on 130 diamond core drill holes totalling 67 943 m, which contained about 45 512 assay intervals, of which effectively all were assayed for gold and silver.
Newstrike CEO Richard Whittall recently told Mining Weekly Online he was “very pleased” with the numbers.
“Ana Paula is a sweetheart of a project. We have a structurally controlled breccia zone that outcrops at several places. This would almost certainly translate to a low strip ratio, with the significant potential to discover more related deposits on our properties in the area,” he said.
The technical report noted there were several locations within the conceptual cone openpit that held near-surface material that required further drilling before it too could be included in the resource model. This was also true for pod-like bodies in the lower part of the in-pit breccia zone that also needed confirmation to be mineable underground targets, before being included in the resource.
The report also noted the openpit resources would increase if the results of ongoing studies justified the use of higher metals-price, higher recovery-rate, lower operating-cost and/or steeper pit slope angle assumptions.
Initial carbon-in-pulp (CIP) and carbon-in-leach (CIL) cyanide tests over 96 hours returned gold recoveries of 77% to 81%, while conventional froth-flotation tests returned 93% to 96% gold recoveries to concentrate. Conventional CIL/CIP cyanide leach tests of the flotation concentrate ranged from 79% to 84% gold recoveries, which would warrant more grind, reagent and flotation optimisations to obtain a recovery rate of 85% or more.
Whittal, who along with Newstrike VP of exploration Gillian Kearvell and several other senior management and directors of the company were credited with the discoveries of Goldcorp’s Los Filos project and Torex Gold Resources’ Morelos project, also in the Guerrero gold belt, said the company was currently targeting exploration of a north-east trend of about 13 km of discontinuous mineralisation that had the potential to significantly lift the overall resources of the Ana Paula project.
He pointed to the nearby-located Los Filos and Morelos projects as both having started out with relatively small- to medium-sized resources, and both projects had over time enlarged the resources exponentially.
As it stood, Los Filos currently held about 13.6-million ounces of gold and 95.8-million ounces of silver in all resource categories, and the Morelos project contained about 5.4-million ounces of gold and 9.7-million ounces of silver in all resource categories.
The significance of this was that Ana Paula lies on the same mineralised trend.
The company had budgeted about $15-million for exploration this year, and would aim at completing 40 000 m to 45 000 m of drilling on target to the north, east and south of the Ana Paula project.
Newstrike’s TSX-V-listed stock on Thursday traded at C$1.39 apiece.