Rupert Resources completes first resource estimate on Ikkari

In less than 18 months from drilling the discovery hole, Rupert Resources (TSXV: RUP) has released its first resource estimate on the Ikkari gold deposit, part of its Rupert Lapland project in northern Finland.

The junior explorer says Ikkari has inferred resources of 49 million tonnes grading 2.5 grams gold per tonne for 3.95 million oz. of contained gold. The estimate included open pit and underground resources. Of the 3.95 million oz., 2.51 million oz. are designated as open pit and 1.44 million oz. as underground.

The estimate was based on 36,000 metres of drilling to the end of June.

The deposit, 30 km from the town of Sodankyla, remains open at depth and along strike and the company plans to drill a further 28,000 metres during the remainder of this year and 62,000 metres in 2022.

Highlights from infill drilling since the resource cut-off date at the end of June, have included 5.4 grams gold per tonne over 122.3 metres from 241.7 metres in hole 121070, including 16.9 grams gold over 11 metres from 286 metres and 10.6 grams gold per tonne over 10 metres starting 322 metres downhole.

Rupert Resources plans to update the resource estimate and complete a preliminary economic assessment on Ikkari by the middle of next year.

CEO James Withall stated in a press release that the time it took the company to release its first resource estimate was roughly “half the industry average” and noted that “the demonstrated size, grade, cohesive mineralization and growth potential, combined with non-refractory metallurgy and proximity to infrastructure, positions Ikkari as one of the most high-quality advanced exploration-stage assets of recent years.”

Following news of the resource estimate, Brian Quast of BMO Capital Markets raised his target price on the stock from $6.50 per share to $10.00 per share. At presstime in Toronto the company was trading at $5.65 per share within a 52-week trading range of $2.77 and $6.20 per share.

The mining analyst commented in a research note that the resource estimate had “exceeded our expectations.”

“The estimate is well above our expectations (38.2 million tonnes at 2.44 grams gold per tonne for 3.0 million oz.),” he wrote.

“Mineralization characteristics–continuity, proximity to surface, non-refractory–paint a picture of strong development economics.”

Tom Gallo of Canaccord Genuity has a target price of $6.50 per share on the company. “This is a very robust first pass and provides a solid base for continued discovery and definition of this resource,” Gallo commented in a research note. “We model an open-pit only resource of 3.05 million oz. averaging 2.69 grams gold per tonne and a conceptual operation consisting of 10 years with average production of ~300,000 oz. a year.”

The deposit was discovered using regional exploration that focused on geochemical sampling of bedrock/till interface through glacial till deposits of between five and forty metres thick.

There was no outcrop, and the first hole, drilled in April 2020, returned 54 metres grading 1.5 grams gold per tonne starting from 25 metres depth. The hole was under 13 metres of glacial till cover.

Results from metallurgical testing have demonstrated up to 99.5% of gold could be recovered using conventional processing methods.

The site is about three km from 220kv power lines and 5 km from an existing transformer station.

Ikkari makes up part of the junior explorer’s flagship Rupert Lapland project in Finland’s Central Lapland Greenstone Belt and is currently Rupert Resources’ main focus. The project consists of Ikkari and the permitted Pahtavaara mine and mill within a total land package of 595 sq. kilometres.

The project, which the company acquired in 2016 for about US$2.5 million, sits about 150 km northeast of the town of Rovaniemi and about 50 km from Agnico Eagle Mines (TSX: AEM; NYSE: AEM) Kittila gold mine, the largest gold mine in Europe. Agnico took a 9.9% stake in Rupert Resources in February 2020.

Pahtavaara is also about 20 km from the polymetallic deposits at Boliden’s Kevitsa nickel, copper, PGM mine, one of the largest mineral discoveries in Finland, and Anglo American’s (LSE: AAL; US-OTC: AAUK) Sakatti copper-nickel-PGM project.

Pahtavaara previously produced more than 420,000 oz. gold over a 16-year period of open-pit and underground operations, and last operated in May 2014. The project has an inferred resource estimate from 2018 of 4.6 million tonnes grading 3.2 grams gold per tonne for 474,000 ounces. The resource estimate used a 1.5 gram gold cut-off grade.