VANCOUVER (miningweekly.com) – Canadian gold producer Mandalay Resources has reported significant exploration success at its 100%-owned Björkdal mine, in Sweden, lifting the measured and indicated resource estimate 52% from 598 000 oz gold, to 911 000 oz as at September 30.
The Toronto-based company, which acquired the mine in 2014 from Elgin Mining for C$70-million, also reported a 40% increase in reserves as of September 30, to 586 000 oz, which supports a mine life of about ten years (up from eight years previously), based on the 2017 production guidance range of 50 000 oz to 55 000 oz.
The company spent $5.94-million on drilling to accomplish this, resulting in a low average discovery and conversion cost per ounce of just $28.
Mandalay CEO Mark Sander stated that the company continues to expect the reserves and resources to grow significantly with future exploration efforts planned at the asset.
Total reserves now total 10.8-million tonnes grading 1.69 g/t gold, for contained gold of 586 000 oz, of which 4.3-million tonnes grading 2.52 g/t is contained in the underground mine, at a cutoff grade of 1 g/t.
Mandalay reported inferred resources at 3.6-million tonnes grading 1.71 g/t for 196 000 oz of contained gold. The company assumes a gold price of $1 200/oz for reserves and $1 400/oz for resources. In the underground mine, Mandalay generated exploration success in all principal production areas drilled and expects to show further increases in reserve ounces from the planned work in 2017.