RNC Minerals Corp. [RNX-TSX] shares took off like a rocket Monday September 10 after the company announced a new gold discovery at its Beta Hunt Mine in Australia. Over the past week, approximately 9,250 ounces of high-grade gold was produced from a 130-tonne cut on the mine’s 15 level. That is equal to over 70 oz/tonne or 2,200 g/t gold.
RNC Minerals jumped 116.67% or $0.105 to 19.5 cents on the news on volume of 25.2 million shares. The shares previously traded in a 52-week range of 7 cents and 38 cents.
The company said the high-grade (coarse gold and large gold-containing specimen stones), includes approximately 190 kg of specimen stone, the largest of which is 95 kg with an estimated gold content of 2,440 ounces and a second large specimen stone of 63 kg with an estimated gold content of 1,620 ounces.
“Final ounces will be determined once the coarse gold is processed and/or sold over the next week, which is expected to yield approximately $15 million in cash,” the company said. All of the high-grade coarse gold is hand-picked, direct ship ore and immediately sent from the site directly to the Perth Mint.
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.
When in production, the Dumont Mine is expected to rank as the fifth-largest nickel sulphide operation in the world by annual production. Only the mining operations at Norilsk (Russia), Jinchuan (China), Sudbury, Ontario, Canada), Voisey’s Bay (Newfoundland and Labrador, Canada) will be larger, the company said.
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.
“Recovering 9,250 ounces of high-grade coarse gold from a single cut on the 15 level at our Beta Hunt mine, including specimens which could rank among the largest ever discovered, underlines the importance of this discovery,” said RNC CEO Mark Selby. “Just eight weeks earlier, at the end of June 2018, 1,500 ounces of high-grade gold were recovered from other sediment structures on the 14 and 15 level,” he said. “These discoveries highlight the high-grade gold potential of Beta Hunt.’’
Given the significance of this discovery to the exploration potential and value of Beta Hunt for RNC shareholders, as a result of the discovery and related developments, RNC is no longer in exclusive discussions with a preferred bidder for Beta Hunt.
RNC said it is the first owner of the Beta Hunt Mine to focus on deeper drilling in the Lunnon Basalt in its search for gold, and therefore the first owner to discover and mine gold from newly discovered coarse gold located entirely within the Lunnon Basalt.
Previous bonanza-grade specimen stone occurrences at Beta Hunt were associated with the nickel-sulphide-bearing contact between the Lunnon Basalt and the overlying Kambalda Komatite, where nickel mining has been the focus of RNC and previous owners.