Galleon Gold Corp. [TSXV-GGO], a company owned 21% by financier Eric Sprott, said Thursday it has reached a key milestone at its 100%-owned West Cache gold project near Timmins Ont. as it prepares to extract a large bulk sample. The company said it has filed a notice with the Ontario Ministry of Mines of its plan to move the project from exploration to advanced exploration status.
Galleon Gold shares advanced on the news, rising 4.7% or $0.005 to 11 cents. The shares currently trade in a 52-week range of 40 cents and 10 cents.
“Transitioning West Cache from exploration to advanced stage exploration is a critical milestone for Galleon Gold,’’ said Galleon President and CEO David Russell. “Once we receive the final acceptance of our closure plan and other necessary permits, we can start to de-risk the project with our 86,500-tonne test mining program,’’ he said. “The production and processing information gained from the bulk sample, along with underground drilling to delineate additional gold targets, will roll into pre-feasibility work in preparation for full-scale mining operations at the West Cache gold project.’’
Previously known as the Timmins Porcupine West Project, West Cache covers 10,370 hectares and is contiguous to the Timmins West Mine (now owned by Pan American Silver Corp. [TSX-PAAS, NASDAQ]).
The property has been explored since 1927 by numerous ground geophysical surveys and up to 111 diamond drill holes. In 1984, Dome Exploration discovered and delineated a gold mineralized zone that was approximately 350 metres long and 45 metres wide. Drill programs by Teck Resources Ltd. (TSX-TECK.B, TSX-TECK.A, NYSE-TECK) and others extended the mineralization to a depth of 350 metres.
A 2022 preliminary economic assessment (PEA) for the project demonstrates strong economics and blue-sky exploration upside the company has said. According to an updated mineral resource estimate dated January 10, 2022, the project contains an underground indicated resource of 472,000 ounces. On top of that is an inferred resource of 1.08 million ounces.
The PEA envisages a toll processing scenario, a mine life of 11 years, and initial capital costs of $150 million. Average annual production is forecast at 85,470 ounces of gold at a grade of 3.09 g/t.
The bulk sample has been designed for approximately 86,500 tonnes of grade 8.13 g/t gold, containing an estimated 22,600 ounces of gold (prior to recoveries). The company said four stopes will be mined from the Zone #9 orebody. Zone #9 is a high-grade gold zone that extends along a geological horizon from the bedrock interface to a known depth of 350 vertical metres below surface.
The company said Zone #9 has seen little to no exploration below a drilled depth of 350 metres. Underground drilling from the bulk sample ramp is planned to ascertain the zone’s stratigraphic and structural relationship to deeper zones known to exist at depths of 550 metres to over 1.0 kilometre.