Musing on the Resource Estimate. One interesting difference in this new resource estimate is the division between "mill" and "heap leach" in the open pit part of the resource. This is likely telegraphing something from the upcoming PEA.
Previous studies showed that the ore can be processed either through a conventional mill, or by heap leaching. Management has been saying that it's nice to have the option between the higher capital cost, more efficient mill operation and the lower capital cost, less efficeient heap leach operation. By dividing the resource between the two, they seem to be telling us to expect them to do both.
Without a heap leach operation, the lower grade stuff would be waste rock. In the open pit, most of it would likely have to be moved anyway, so the cost of blasting, loading, hauling and dumping are all unavoidable. Might as well dump it on a heap leach pad and get something out of it. In the underground part of the resource, it is too low grade to bother mining.
All in all, this resource estimate was at the high end of what I was expecting. The grade of the underground resource still seems a bit low to me, but just the open pit is almost 2.3 million ounces, and the grades there look great. Then again, I'm no expert.
With more drilling to come, I expect over 3 million ounces in the resource estimate they use for the PEA. I wouldn't be surprised to see the PEA based on just the open pit resource though.