Beaver Dam overflows (January 16, 2006)

A revised resource figure for the Beaver Dam gold project in central Nova Scotia has nearly doubled the size of the known deposit.

Owner Acadian Gold (ADA-V, ADGLF-O) says the estimate, prepared by outside consulting firm Mercator Geological Services, puts the measured and indicated resource at 2.9 million tonnes grading 2.97 grams gold per tonne, or 2.27 grams per tonne if block grades are cut back to 12.75 grams per tonne. An inferred resource of 2.9 million tonnes grades 3.36 grams per tonne, or 2.63 grams after assays are cut to 12.75 grams.

The estimate used a cutoff grade of 0.3 gram per tonne above 200 metres vertical depth, and 1 gram per tonne at deeper levels. About 93% of the contained gold is in the Main Zone at levels above 200 metres.

An October 2004 estimate put the measured and indicated resource at 1.3 million tonnes grading 2.35 grams per tonne, or 2.22 grams per tonne after cutting. An inferred resource of 3.8 million tonnes graded 2.73 grams per tonne uncut or 2.09 grams cut; much of the new increase brings inferred resources into better-confirmed categories.

The new calculation was based on historical drilling plus an 18-hole program completed by Acadian last year. Another 26 holes have been drilled with assay results pending.

Acadian has established new resource figures on four of its properties in the central Nova Scotian gold belt. At Forest Hill, 40 km south of Antigonish, N.S., the indicated resource stands at 225,000 tonnes grading 24 grams gold per tonne, or 14.9 grams per tonne with block grades cut to 50 grams per tonne. An inferred resource includes a further 383,000 tonnes at 12.4 grams.

At Tangier, about 50 km south of Beaver Dam, there is an indicated resource of 134,000 tonnes averaging 9.7 grams gold per tonne, plus 271,000 tonnes of inferred resources running 15.1 grams. The Goldenville property, about 30 km southwest of Forest Hill, has a small indicated resource plus 385,000 tonnes of inferred resources grading 18.8 grams per tonne, or 12.4 grams if block grades are cut to 50 grams per tonne.

Acadian completed an offering for one million units at 25 per unit, each consisting of a share with an attached warrant, exercisable at 35 for 18 months. The company has bought the 1,500-tonne-per-day Scotia mill at Gays River, about 50 km west of Beaver Dam, from HudBay Minerals (HBM-V, HBMFF-O), which has previously been used for test milling of mineralized material from Beaver Dam, with gold recovery around 88%.