New Gold Resource Estimate Boosts Treasury Numbers

Treasury Metals (TSX:TML) has released an updated mineral resource estimate for its flagship Goliath gold project in Northern Ontario.

The new estimate, which is an update of a 2015 report, boasts a 64-percent increase in measured and indicated gold equivalent ounces for the underground portion of the project. The total comes in at 640,100 gold equivalent ounces at an average grade of 5.54 grams per tonne.

The 2018 estimate is based on additional information from 41,500 meters of infill drilling across 98 diamond drill holes between 2016 and 2018.

Measured and indicated resources for the project (including both open-pit and underground components) now sit at 1,229,800 gold equivalent ounces.

The increase is due to the additional drilling, as well as “redefining the boundary between the underground and open pit mineral resources resulting in a higher portion of gold equivalent ounces reported within the underground mineral resource capturing the high grade ounces.”

Treasury Interim CEO Greg Ferron said that the company is pleased with the success it has had in converting inferred resources to indicated across open-pit and underground targets.

“Our future programs will now focus on growth through exploration, and particularly the expansion of higher grade mineral resource both at depth and along strike within the developing C Zone shoots,” said Ferron.

He added, “[o]ur ongoing project optimization work has identified opportunities to significantly improve the mineral resource grade of the Main Zone by using a higher grade cut-off, and still maintain the majority of the contained gold equivalent ounces. This analysis shows higher mineral resource grades, continuity at the higher cut-off grades and the potential to expand the mineral resource at depth.”

There was also a significant increase in gold equivalent grades, with in-pit grades increasing 9 percent to 1.45 grams per tonne, out-of-pit grades increasing 8 percent to 5.54 grams per tonne and total grades increasing 34.1 percent to 2.36 grams per tonne.

“Mineral Resources at Goliath remain open at depth and has exploration potential for additional mineralized shoots along strike,” states the report.

Goliath is “slated for near-term Canadian gold production,” according to the company, which says that the project is advancing through the permitting process for an open-pit mine and 2,500-tonne-per-day processing facility “in the near future”.

Treasury’s website indicates that it envisages a producing mine that would generate 87,000 ounces of gold a year, with peak production exceeding 100,000 ounces annually. With the news on Wednesday, Treasury’s share price went up by 1.75 percent in Toronto, closing at C$0.29.

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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.