Nighthawk Gold expands Colomac resource estimate in NWT by a third

Nighthawk Gold (TSX: NHK; US-OTC: MIMZF) increased its open-pit indicated and inferred mineral resources at its Colomac project in the Northwest Territories by more than a third while also improving overall grade.

The project 200 km north of Yellowknife has an open-pit indicated resource of 59.8 million tonnes grading 1.5 grams gold per tonne for 2.8 million oz. of  contained metal versus 2 million oz. in an estimate last year, a 36% jump, Nighthawk said in a news release on Friday. The grade improved 5% from 1.4 grams gold.  

The open-pit inferred resource increased to 10.8 million tonnes grading 2.3 grams gold for 802,000 oz. contained metal, a 34% gain from last year’s estimate of 601,000 oz., the company said, though the grade slipped from 2.4 grams gold.  

Haywood Capital Markets said the new estimate bodes well for a preliminary economic assessment (PEA) on the project due by mid-year and the company’s valuation.  

“We are encouraged by the updated resource which favours the development of an open-pit deposit at Colomac,” Haywood mining analyst Pierre Vaillancourt wrote in a note on Friday. “The upcoming PEA should help to bring focus to the economic potential of the project. We expect Nighthawk will continue to build on the existing resource and improving the potential of the project.”  

Laurentian Bank noted the increase in the open-pit resource total to 3.6 million oz. from 2.7 million oz. and an increase in average grade to 1.6 grams gold from 1.5 even though the study used slightly lower cut-off grades. It also said Nighthawk stock trades at $9 enterprise value per oz. versus a peer group average of $66 enterprise value per ounce.  

“Of the overall 3.6 million oz. in open-pit resources, most of these ounces continue to fall in the indicated category (78% vs. 77% previously), which should provide an increased level of confidence,” Laurentian mining analyst Ryan Hanley wrote in a note on Friday. “Despite a growing resource base, Nighthawk continues to trade at a sharp discount to its peers.”  

The combined open-pit and underground indicated resource rose to 70.4 million tonnes grading 1.5 grams gold for contained metal of 3.4 million oz., a 26% jump from 2.7 million oz. in last year’s estimate. The corresponding inferred figures are 24.3 million tonnes grading 2.2 grams gold for 1.7 million oz., a 27% gain from last year’s estimate of 1.3 million ounces. 

‘Top tier’ potential

Keyvan Salehi, Nighthawk president and chief executive officer, noted how the open-pit indicated resource estimate of contained metal rose by 415% while maintaining above-average grades compared to deposits in advanced development.  

“If the project is developed, it could have the potential to be a top-tier gold project with respect to size, scale, and economics, located in a mining-friendly jurisdiction,” Salehi said in the release. “We believe there is a massive potential for discovering more gold mineralization across our 930-sq.-km district-scale property. All our deposits remain open in all directions and show great promise for further expansion in mineral resource ounces.” 

The resource update is based on four deposits in Colomac Centre: the Grizzly Bear, Colomac Main, Goldcrest, and 24/27 deposits; as well as four higher grade satellite deposits 11-28 km away: Kim, Cass, Damoti and Treasure Island. 

The update benefits from data collected during an additional 40 km of drilling in 2022, which targeted areas of higher-grade, near-surface mineralization, the company said.  

Nighthawk acquired Colomac in 2012. It had been mined intermittently between 1990 and 1997 but was limited to one of three shallow open pits and only targeted a small portion of the 7-km strike length. 

Shares in Nighthawk rose more than 4% on Friday afternoon in Toronto to 47¢ apiece, within a 52-week range of 26¢ and 94¢, valuing the company at $57.8 million.