RNC digs up more high-grade gold at Beta Hunt

RNC Minerals Corp. [RNX-TSX] shares rallied in active trading Tuesday September 24 after the company said it has recovered additional high-grade coarse gold at its Beta Hunt Mine in Western Australia.

An estimated 1,750 ounces of coarse gold has been recovered from 274 kg of rock, the company said in a press release. It said the discovery occurred on the 16 Level A Zone, 160 metres south and 25 metres below the Father’s Day Vein discovery and on the same level as the high-grade gold mined in June, 2019.

“It is important to note that these high-grade coarse gold discoveries exposed by normal mining practises are not included in the updated Beta Hunt resource estimates. “These occurrences are best considered as a potential periodic significant bonus to mine production,” the company said.

The announcement comes after the company said it was raising $18 million from a bought deal financing to fund the continued ramp-up of production at the company’s Beta Hunt Mine and the integration with the Higginsville Gold Operations (HGO) which are both located in Western Australia, about 100 kilometres from Kalgoorlie.

RNC’s key asset is a 100% interest in the producing Beta Hunt gold mine. RNC attracted international attention last year following news of a once-in-a lifetime gold strike in the Father’s Day Vein 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 stone contained 1,620 ounces.

HGO includes a 1.3 million tonne processing facility, a historical mineral resource of 1.9 million ounces, 370,000 ounces of gold reserves and 386 square kilometres of tenure with gold mineralization potential.

“With the addition of the Higginsville mill and mine in June, RNC now has the ability to monetize these high-grade discoveries more efficiently compared to previous toll milling arrangements,” the company said.

On Tuesday, RNC shares reacted to the news by rising 12.3% or $0.042 to 38.7 cents on volume of 3.3 million. The shares are currently trading in a 52-week range of 33 cents and $1.18.

“Once again we have encountered an area of high-grade coarse gold in the same geological setting as the Father’s Day Vein,” said RNC Chairman and CEO Paul Andre Huet. “Approximately 20 ounces of gold was expected to be recovered from this area where 1,750 ounces were recovered,” he said. “This further highlights the potential of the Beta Hunt Mine, demonstrating the significant upside these high-grade discoveries can have on operational cash flow demonstration.”

Huet said the company will look to quickly monetize this gold to capitalize on current AUD $2,250 per ounce Australian gold prices. “This will continue to bolster our already strong treasury position following our recently completed $18.5 million bought deal financing,” he said.

RNC has said it plans to resume full scale production at Beta Hunt In the third quarter of 2019. Beta Hunt is located 57 kilometres north of the HGO property.

RNC’s other key asset is a 28% interest in a nickel joint venture that owns the Dumont Nickel-Cobalt Project in the Abitibi region of Quebec. This property contains the second largest nickel reserve and ninth largest cobalt reserve in the world.