Prodigy Gold‘s (PDG-V) shares got a boost during intraday trading after the junior released more drill results from its 20,000-metre drill program to in-fill and expand resources at its Magino gold deposit near Wawa, Ont., on May 18.
The shares moved up 5¢ to 65¢ before dipping to 60¢ on a volume of 636,000 shares. (The company has a 52-week trading range of 19¢-81¢.)
In-fill hole S-88-0007, which was drilled in the deposit’s northeastern end, assayed 207 metres grading 1.24 grams gold per tonne. The company says the hole correlates with previously reported holes 1, 3 and 4, which were released in mid-March, where hole 4 intersected 261 metres grading 1.13 grams gold. Prodigy notes that these holes expanded and upgraded the northeastern portion of the deposit.
At Magino’s southwestern edge, hole 14 hit 107 metres of 1.04 grams gold and hole 16 cut 57 metres of 0.73 gram gold. The company says both holes showed significant gold mineralization, which could expand resources southwest of the current proposed open pit at Magino.
A preliminary economic assessment (PEA) released in April outlines that an open-pit mine at Magino would produce an average of 166,500 oz. gold a year over a nine-year life, totaling 1.5 million oz. gold, at an average cash cost of $521 per oz.
The company also reported four other holes (12, 15, 17 and 21) that hit new gold mineralization along Magino’s southern edge. The most notable of the four was hole 12 hitting 212 metres of 0.69 gram gold, including 61 metres of 1.06 grams gold.
Other holes that hit long intercepts at Magino include: hole 7, which cut 211 metres of 0.5 gram gold; hole 8 intersected 30.9 metres of 0.92 gram gold, including 417 metres of 0.71 gram; and hole 9 cut 262 metres of 0.79 gram gold, including 119 metres of 1.04 grams. (The company notes that the true thickness for holes 8, 9, and 14 is thought to be 76% of the length value).
However, Prodigy says that the longer hits could boost the proposed mine plan because they identified stockpile material that could possibly be blended with higher-grade ore to produce a consistent head grade for the mill once the proposed mine is built.
The PEA estimates startup costs for the mine to be $242 million, while the project would have a pretax net present value of $351 million, at a 5% discount, and a 49% internal rate of return.
Magino has an indicated resource of 51.6 million tonnes grading 1.16 grams gold for 1.9 million oz. gold, and another 17.5 million inferred tonnes of 1.04 grams gold for 587,100 oz. gold.
A feasibility study for Magino is set for early 2012.
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