Strong drill results from Haile

Romarco Minerals (R-T) is continuing to see high-grade results from its Haile gold property in South Carolina as part of its ongoing drill program.

On July 25, it released the fourth-best hole ever seen on the property since it was discovered in 1827.

The hole hit 23 metres of 45.8 grams gold per tonne, including a 6.1-metre zone grading 111.5 grams gold. The intercept came from the Horseshoe zone at 144 metres depth.

Romarco says the zone continues to return most of the high-grade mineralization at the property.

However, a few days earlier, hole RCT-87 cut 117.4 metres of 5.5 grams gold in the new Mustang zone. The intersection included an 11.6-metre zone of 29.1 grams gold containing a 0.9-metre intercept of 266.3 grams gold.

“RCT-87 at Mustang is the most significant drill hole since we had the Horseshoe discovery hole (62.5 metres of 9.6 grams released March 1, 2010),” said Diane Garrett, Romarco’s president and CEO in a press release.

Horseshoe confirmed that there’s an underground potential at Haile. This year, Romarco plans to complete a preliminary economic assessment to study that potential at the mine.  

Although, the company has completed more than 280,000 metres of exploration drilling since acquiring Haile in late 2007, Garrett says the system continues to expand as a “world-class” orebody and still remains open in all directions.

 Mustang sits about 180 metres below the current US$950-per-oz. reserve pit and between the Ledbetter and South pits. The zone indicates that the grade and continuity between the pits continue to grow and may lead to the two merging.

Although, Mustang is an open-pit target, an extension of the zone plunges to the northeast and is recognized as an underground target. Romarco says that portion could be added to the underground plan examining the Ledbetter, Snake and Horseshoe pits.

Currently, the company is working through a 172,000-metre drill program, with 11 rigs on the property. The main goal of this year’s exploration program is to define the shape and extent of the Haile mineralized system, along with upgrading inferred resources into the measure and indicated categories and pinpointing areas for production related facilities.

As outlined in a February 2011 feasibility study by M3 Engineering & Technology, reserves at Haile stand at 30.5 million tonnes grading 2.06 grams gold per tonne for 2 million oz. gold.

The study did not include the Horseshoe, Snake Deep, West Ledbetter and some portions of the Mill Zone, Small and Champion deposits. Despite this, it showed robust economics. At a gold price of US$950 per oz. and a 5% discount rate, the pretax net present value came at $279 million and the internal rate of return at 19.6%.

The cost to build the mine is $275 million. Haile has a minimum open-pit life of 13 years at a milling rate of 7,000 tons per day.

Romarco originally expected to start construction at Haile next year, and production in 2013; however, delayed its timeline by a year after the U.S. Army Corps of Engineers asked the company in early July to complete an environmental impact statement (EIS) to assess the impact mining would have on the nearby wetlands and streams.

“Completing an EIS removes uncertainty about any future potential challenges to an environmental assessment,” stated Garrett. “The EIS will only address the wetlands aspect of the mining operation.”

The 404 wetlands permit is the only federal permit the company needs, although it requires a few other permits before it can revive the past-producing mine.

Haile is situated within the Carolina slate belt, which stretches from Georgia to Virginia. The belt is famous for hosting several gold deposits such as the past-producing Brewer and Ridgeway mines. Haile began production in 1827, and produced periodically until the 1990s.

Before the new study, federal regulators said Romarco may only need to complete an environmental assessment (EA) for the mine.

In late 2010, the company applied for a state mine operating permit and the federal 404 wetlands permit, where it proposed to conduct an EA in lieu of a detailed EIS.

But now with the EIS, the company is setting aside $2 million, adding 12 months to its timeline, and delaying 800 jobs.

The company anticipated employing 500 people during the construction phase, and another 300 once in production.

Romarco has spent more than $4 million on environmental studies for Haile.

On the latest drill news, its stock gained 9% to $1.87 during intraday trading. Romarco has a 52-week trading range of $1.30-$2.88.