Brigus expands gold resources at Black Fox

Brigus Gold (brd-t, brd-x) grows its gold resources at the Black Fox complex in Timmins, Ont.

The company recently reported an initial global resource estimate of more than half a million oz. gold for its 147 and Contact zones.

In the indicated category the zones host 116,710 oz. gold from 867,100 tonnes grading 4.18 grams gold per tonne. They have another 459,420 oz. from 5.4 million tonnes grading 2.61 grams gold in the inferred category, bringing combined resources to 576,130 oz.

“We are very pleased with the initial resource estimate,” said Howard Bird, Brigus’ vice-president of exploration, in a prepared statement. “We believe these resource ounces represent near-term production opportunities given their proximity to our Black Fox infrastructure including the Black Fox mill which is currently being expanded.”

The zones are located 4 km southeast of the company’s Black Fox gold mine. The current resource was based on 255 holes, where 169 holes were drilled into the Contact zone, and 86 in the 147 zone. Brigus has another 95 drill holes with assays pending, which weren’t included in the estimate.

To calculate the initial resource, the company used cut-off grades of 2.63 grams gold for a potential underground mine at Contact, and 0.65 gram gold for an initial pit at the 147 zone.

Brigus is exploring the possibility of mining the 147 zone as a combined pit and underground operation, while developing the Contact zone as an underground mine. It will make a production decision on the zones in early 2012.

“The 147 zone has some modest open-pit potential while the underground could be accessed from an exiting old decline nearby and would probably take 12 months to develop – suggesting first ore in mid-2013 at the earliest, subject to permitting,” comments Haywood Securities’ analyst Kerry Smith in a note.

Despite the good news that the company announced on Dec. 15, Brigus’ shares in Toronto closed down 5% to $1.04, while the TSX Composite Index dropped 38.63 points to 11,504.42. The spot price of gold also slipped US$5.90 per oz. to close the day at US$1,570.60.

Smith reiterates his sector outperform rating on Brigus and 12-month target of $3.