Maritime Resources Corp. [MAE-TSXV] shares rallied Tuesday after the company released the results of a preliminary economic assessment for its Hammerdown gold project, including the satellite Orion deposit, in Newfoundland and Labrador.
Commander Resources Ltd., [CMD-TSXV], which holds a 2.0% net smelter return royalty interest on the Hammerdown property but not on the Orion deposit, also advanced on news of the PEA results.
Maritime Resources holds a 100% interest in the Green Bay property near Springdale Newfoundland and Labrador. The property hosts the past-producing Hammerdown gold mine, the Orion gold deposit, and Lochinvar precious metals deposit.
Rambler Metals and Mining Plc. [RAB-TSXV] has a strategic investment in the Hammerdown gold mine, held through a 17% equity stake in Maritime Resources, and is sharing its technical expertise with Maritime as it assesses the merits of restarting the Hammerdown mine. Rambler’s key asset is a 100% ownership of the Ming copper-gold mine, an operating base and precious metals processing facility and year-round bulk storage facility located in Baie Verte peninsula in Newfoundland.
The Hammerdown Mine as last operated by Richmont Mines between 2000 and 2003, producing 143,000 ounces of gold at an average grade of 15.7 g/t through a combination of narrow vein, open pit and underground mining. The ore was processed at the Nugget Pond mill, now owned and operated by Rambler Metals. Richmont was acquired by Alamos Gold Inc. [AGI-TSX, NYSE] in November, 2017.
Mining concluded in 2004 due to low gold prices with mineralization remaining, although uneconomic at the time.
On Tuesday, Maritime said the PEA provides an updated resource estimate and a base case assessment of developing the project as a combined open pit and underground ramp access mine with an on-site gold pre-concentration plant and mineral processing through the Nugget Pond mill gold circuit.
Highlights from the PEA include life of mine total gold production of 521,500 ounces averaging 57,900 ounces annually. Life of mine cash costs are estimated at US$802.55 an ounce with an all-in-sustaining costs pegged at US$938.80 an ounce.
According the PEA, the project would require pre-production capital expenditures of $57.2 million.
“Nearly 20 years ago, the former Hammerdown mine was one of the highest-grade gold mines in Canada with a life-of-mine grade of 15.7 g/t and operated when gold prices averaged US$320 an ounce,’’ said Maritime’s President and CEO Garett Macdonald.
The PEA also considers open pit and underground mining at both the Hammerdown and Orion deposits with pre-concentration of the mineralized material through a sorting plant and haulage to an off-site mill for gold dore production.
These estimates consider total pit constrained measured and indicated resources at Hammerdown and Orion of 1.7 million tonnes grading 6.65 g/t gold or 368,000 ounces. They also consider a measured and indicated underground resource of 1.15 million tonnes, grading 4.13 g/t gold or 153,000 ounces.
On Tuesday, Maritime shares jumped 15.4% or $0.01 to 7.5 cents on volume of 431,000. The shares trade in a 52-week range of $0.06 and 12 cents. Commander shares also gained 15.4% or $0.01 to 7.5 cents and now trade in a 52-week range of $0.06 and 11 cents.