Historical Resource Numbers Are A Relevant Consideration On March 23, 2013, Maudore Minerals acquired the SG processing facility from North American Palladium.
This mining infrastructure and property is what they had acquired at that time. They thought, it was a pretty astute acquisition! Today, Abcourt Mines feels the same.
But what the previous operator failed to accomplish, Abcourt believes it will! Today's company has the commanding edge.
What consummates the deal, between shareholder and management, is the present day price of gold!
https://www.prnewswire.com/news-releases/maudore-acquires-sleeping-giant-processing-facility-and-gold-assets-from-north-american-palladium-512126211.html Project | | Historical Mineral Resource Estimates | Gold Resource
(x1000 oz) | Category |
| Discovery | 2008 measured resources of 3,109 tonnes grading 8.95
g/t for 895 ounces, indicated resource of 1,278,973
tonnes grading 5.74 g/t Au for 236,180 ounces and an
inferred resource of 1,545,500 tonnes grading 5.93 g/t
Au for 294,473 ounces. | 1
236
294 | Measured
Indicated
Inferred |
| Flordin | A 2011 measured resource of 116,000 tonnes grading
3.25 g/t Au for 12,133 ounces Au, indicated resource of
2,707,000 tonnes grading 1.77 g/t Au for 153,998
ounces Au, and 2,199,000 tonnes grading 1.95 g/t Au
for 137,561 ounces Au. | 166
137 | Measured
and Indicated
Inferred |
Sleeping
Giant | A 2008 measured and indicated resource of 489,200
tonnes grading 9.7 g/t Au for 152,743 ounces Au. | 153 | Measured
and Indicated |
So from the known but non-compliant 43-101 historical records, we have been given the following information:
1. From the Discovery property they had:
A. measured resources of 895 ounces.
B. indicated resources of 236,180 ounces.
C. inferred resources of 294,473 ounces.
D. Total = 531,548 ounces of gold.
2. From the Flordin property they had:
A. measured resources of 12,133 ounces.
B. indicated resources of 153,998 ounces.
C. indicated resources of 137,561 ounces.
D. Total = 303,692 ounces of gold.
Subtotal (from the historical Discovery and Flordin property exploration) = 835,240 ounces.
3. From the SG mine they had:
Measured and indicated resources of 152,743 ounces of gold.
Historically, these 3 properties gave them a resource base of at least 987,983 ounces of gold.
Later Maudore Minerals updated their resources.
https://www.newswire.ca/news-releases/maudore-updates-43-101-mineral-resources-at-sleeping-giant-513159041.html As part of its business strategy, Aurbec Resources, a Maudore subsiduary, began mining selected remnant stopes placed on hold by earlier operators. This effort was made to offset the costs of their drilling campaign. But due to a down turn in the gold price, the company became insolvent.
https://www.insolvencies.deloitte.ca/en-ca/Documents/Mines%20Aurbec%20Inc/ca_en_insolv_Mines_Aurbec_Teaser_150615.pdf https://www.newswire.ca/news-releases/maudore-announces-that-underground-drilling-has-returned-high-grade-gold-at-sleeping-giant-513141291.html Drilling is the essential tool when it comes to properly defining mineral resources, prior to any mining extraction.
Currently, when the money becomes available, Abcourt Mines intends to begin additional exploration drilling on level 8.
"At the Sleeping Giant Mine the objective (drilling) is to explore the upper part of vein 8 (part of the shadow zone)
by diamond drilling. A totol of 6000 meters is planned. In the past, vein 8 was mined from level 485 m to level 975m, where the vein is relatively closer to shaft No 2. The production totalled 628,000 tons with grade of 12.12 g/t Au. Some lateral extensions were left as shown by several intersections shown on the vertical projection of the plan attached.
On the upper levels,with a 32 degree to 45 degree dip the vein moves away from shaft No 2 as it goes up. In the past, with low gold prices, the exploration and mining of this part of vein 8 was not considered feasible.
With the current gold price ($1,500 or $2000 CDA) our mine geologist considers the upper part of vein 8 as a very nice exploration target with a potential of 1,3 M tonnes of mineralization with a grade of about 12 g/t of gold." https://abcourt.com/wp-content/uploads/2019/09/PR2019-09-10.pdf It will not be cheap to mine at Sleeping Giant but once established, the payback period should be fairly quick!
The 43-101 SG report gave its own expendure considerations:
"Capital and Operating Costs The capital cost for the pre-production of the Sleeping Giant mine is estimated at $4.6M, including operating costs of $8.5M, royalties for $0.125M, capital expenditures of $3.4M, a working capital of $1.3M and revenues of $8.7M. The pre-production period is 12 months. During the production period, the sustaining costs are $2.7M including on going capital expenditures of $4.0M and a refund of $1.3M in working capital.
Total operating costs during the production period are $52.4M for an average of $174.84 per tonne treated. Royalty payment of $1.375M are not included in this amount.
Economic analysis
The economic analysis of this report is based on the engineering work done by PRB Mining Services and on the information provided by Abcourt Mines Inc. The economic analysis is based on a gold price of $1,200 US/oz and a rate of exchange of $1.25 CAN/US. The mining plan is for 325,000 tonnes of mineral reserves. Before taxes, a cash flow of $48.1M and a net present value (NPV) at 8% of $39.4M and an internal rate of return (IRR) of 240% are indicated. The pay-back period before taxes is 0.6 year. The project is more sensitive to revenues than operating and capital costs.
After taxes, a cash flow of $30M, a net present value at 8% of $24.6M and an IRR of 184% are indicated. The pay-back period is then 0.7 year. At the current prices of gold of $1.397 US/oz of gold and a rate of exchange of $1.31 CAN/US, the net revenue would be $144.2M and the net present value would be $62M."
Todays price of gold is $1838 US/oz and the exchange rate is $1.28 CAN/US. The gold price remains high, but as the US dollar continues to dramatically fall, the Canadian dollar is rising. The exchange is still good, but is becoming less so.
The exchange rate, if the US dollar continues to fall, may become a valid consideration in any future exploration cost assessment. If the gold price falls considerably, it's not good! All bets will be off the table! And it may become necessary to fold and leave the game!
https://abcourt.com/wp-content/uploads/2018/09/PR2018-09-10.pdf
https://stockhouse.com/news/press-releases/2019/08/08/positive-feasibility-study-for-sleeping-giant-mine-modest-investment-of-only-5m
Abcourt's mining and exploratory properties require considerably more infill and step-out resource drilling to better define, how valuable, they will eventually become.
For the exploratory properties, first a proper 43-101 must be determined. Then a preliminary economic assessment (PEA) needs to be made, to justify each project, as a potential mine. Transportation costs to the mill will be a relevant consideration.
Both nearby properties already have a rich resource base of 825,240 ounces of gold. And they still hold much potential for adding a lot more. Much of the inferred resource category must be brought up to an indicated level by additional infill drilling.
But previous property managers already believed that they had a mine in place. With the present higher gold price, Abcourt has been given a better opportunity, to make that dream become, much more real!
Sleeping Giant as a mine will soon revive. New stopes will have to be opened and provide for extraction that will help pay for the necessary drilling in the many months ahead.
The Elder Mine mineralization will also help makes its contribution to the drilling endeavor.
The previous operator had dealt with drilling cost issue, by exploiting old SG mining remnants, left from the past. Abcourt, has to do, much more work! But with the rich grades of available ore, the effort, once done, will well reward management and shareholders alike!
So the Sleeping Giant Mine, now has a future. Abcourt will soon have an operating mill supplied with ample rich ore of gold.
And the Elder/Tagami mine will continue providing the necessary ounces of gold to add to the mix.
In this company, there is a lot to consider.
But it is good when most of the unknown, still shows, the best of promise!
All the best! Java