Probe Gold shares pop on Val-d’Or East update that doubles resources

Probe Gold (TSX: PRB) shares jumped as high as 22% to $1.55 early trading Thursday after the company nearly doubled its Val-d’Or East resource base.

The company grew global resources to about 10 million oz. contained gold from about 5.2 million oz. a year ago, driven by both the drill bit and recent acquisitions.

Across Probe’s Val-d’Or East assets, measured and indicated resources grew by 77% to 6.7 million oz. and inferred resources by 131% to 3.3 million oz. gold. The flagship Novador project includes the Monique, Pascalis, Courvan, and Beaufor deposits.

Novador hosts a pit-constrained measured and indicated resource of 116.7 million tonnes at 1.43 grams gold per tonne, for 5.37 million oz of metal. In addition, underground resources contribute 5.26 million tonnes at 3.12 grams gold, translating to 527,800 oz of contained metal. Inferred open pit resources add 16.2 million tonnes at 1.72 grams gold, equating to 898,900 oz., with another 6.5 million tonnes at 2.79 grams gold for 582,700 oz. in underground resources.

“The increase in resources at Val-d’Or East has been nothing short of amazing,” CEO David Palmer said in a news release. “We are now part of a very rare group of development assets with over 10 million oz. gold in our mineral inventory.”

Outside the Novador project, Probe Gold’s Val-d’Or East resource estimate also includes the McKenzie Break and Croinor deposits. McKenzie Break, acquired from Monarch Mining in March, is about 20 km from Novador and holds significant high-grade gold resources. The Lapaska deposit contributes inferred resources.

Probe shares last traded at $1.50 in Toronto, up 18% for the day. The stock has touched $1.08 and $1.68 over the past 12 months, and the company has a market capitalization of $268 million.

These resource updates and economic results come amidst record prices for gold and growing investor interest in the safe-haven asset. with prices reaching above US$2,500 per oz., driven by inflation concerns, geopolitical tensions, and central bank buying.

Probe’s resource update follows 95,000 metres of new drilling and enhanced three-dimensional modelling.

The company continues to advance towards production, with a 50,000-metre infill drill program currently underway to support a prefeasibility study scheduled for 2025.

A February preliminary economic assessment for Novador found strong economics with an after-tax net present value of $910 million and an internal rate of return of 24.4%, based on a gold price of US$1,750 per ounce. The mine is expected to produce 255,000 oz. gold over a 12.6-year mine life.