RNC Minerals [RNX-TSX], aka Royal Nickel Corp., shares were active Thursday September 20 after the company released an updated estimate of gold production from the Father’s Day Vein discovery at its Beta Hunt Mine in Australia.
The company said 24,000 ounces of high-grade gold has been produced from development on the 15 level at Beta Hunt. Beta Hunt produced 37,027 ounces of gold last year and 13,780 ounces in the first quarter of 2018.
Investors reacted by sending RNC Minerals shares up 11.69% or $0.045 to 43 cents on volume of 22.8 million. The 52-week range is 7 cents and 44.5 cents.
The announcement comes just days after RNC attracted international attention following news of a once-in-a lifetime gold strike at Beta Hunt. The company said it had extracted 9,250 ounces of gold, worth $15 million, from a 130-tonne cut of rock about 500 metres underground at the mine.
The find included a single 95-kilogram chunk that contained 2,400 ounces of gold, worth about $3.8 million. A second 62-kilogram rock contained 1,620 ounces.
RNC said that in light of the discovery, and its significance to the mine’s exploration potential, it has shelved plans to sell the mine and is no longer in exclusive talks with a preferred bidder.
RNC is headed by a group of former executives of the nickel giant formerly known as Inco Ltd. The Canadian mining icon and its Sudbury, Ontario operations were acquired by Vale [VALE-NYSE] of Brazil in 2006.
RNC principal asset is a 28% stake in a joint venture that owns the Dumont Project, which is located in the Abitibi mining region in Quebec.
RNC has a 100% ownership interest in the producing Beta Hunt gold and nickel mine in Western Australia, as well as a 27% stake in the producing Reed Mine in the Flin Flon-Snow Lake region of Manitoba.
The Beta Hunt Mine, located 600 km from Kambalda, is a deposit with a very rare feature of hosting both nickel and gold resources in adjacent discreet mineralized zones. RNC’s interest is held through a 100% interest in Salt Lake Mining Pty Ltd. (SLM), a private company. SLM operates Beta Hunt by virtue of a sub-lease agreement with Gold Fields Ltd.
On Thursday, the company said the updated production estimate includes additional in-process material from the discovery area, specimen stones and coarse gold recovered from the expanded development area, and an increase in production over original estimates based on final out-turns received from the Perth Mint.
Estimated production from the Father’s Day Vein is expected to increase as the remaining material from the expanded development area is processed and development continues to be extended. However, the company has not provided a production forecast for this year due to the fact that the mine was previously up for sale.
“The cash flow from this massive increase in gold production from the Father’s Day Vein at Beta Hunt will fundamentally improve RNC’s balance sheet to a substantial net cash position, which will allow RNC to begin to aggressively explore the largely untested high-grade gold potential at Beta Hunt,” said RNC President and CEO Mark Selby.