CIBC UpdateKey Points
Berry Zone Resource Overview.
The inferred resource at Berry contains 11.3Mt of mineralized material grading 1.75g/t Au, which includes 10.71Mt of open-pittable material grading at 1.65g/t Au. The company notes that Berry’s geological signature, high grades and mineralization continuity are comparable to the nearby Leprechaun deposit. Similar to the Marathon and Leprechaun deposits, the company has divided the Berry zone’s openpittable resource into ‘High Grade’ (with cut-off grade >0.7g/t Au) and ‘Low Grade’ (with cut-off grade >0.3g/t but <0.7g/t Au). The high-grade portion of the Berry zone includes 494koz grading at 2.64g/t Au, which is significantly higher than the high-grade portion of the current reserve at 1.75g/t Au.
While most of the mineral resource estimate criteria for Berry were similar to that of Marathon and Leprechaun deposits as highlighted in the Exhibit 1 table, the zone features a higher strip ratio of 9.8:1 compared to 6.3:1 at Marathon and 8.9:1 at Leprechaun. The higher strip is likely partially attributed to an unmineralized area between the two Berry Zone pit shells (figure). While the high grades at Berry could offset the additional costs associated with the higher strip ratio, we note the conceptual pit shell at Berry only extends to 200m depth (vs 300-400m at Leprechaun and Marathon), suggesting additional exploration success at depth likely requires underground mining in the future.
Next Steps – Infill Drilling & Resource Upgrade.
Going forward, the company plans to continue the infill drilling at the zone. Marathon has 30,000m of drilling planned for Berry in 2021 and the exploration efforts are expected to continue in 2022. For now, Berry zone is not incorporated in the current mine plan at Valentine Gold project (Feasibility Study was released March 29 – note here). However, once fully delineated and developed, the additional resource at Berry zone could extend Valentine Gold’s current 13- year mine life by deferring the low-grade stockpile processing in years 12 and 13 to a later period.
Price Target remains at $3.75. Outperformer.