Edgewater stacks the gold ounces at Corcoesto in Spain

VANCOUVER — Edgewater Exploration (TSXV: EDW) is closing in on a production decision at its Corcoesto gold property in Galicia, Spain. 

Edgewater has updated the resource estimate at Corcoesto, boosting measured and indicated resources by 203%. That represents two years of an infill drill program, and should form the foundation for a feasibility study scheduled for release this quarter.

Since 2010 Edgewater has drilled 300 holes totalling 50,000 metres at Corcoesto, with the project’s new estimate incorporating around 113,000 metres of drilling — including diamond, reverse-circulcation, geotechnical and hydrogeological drill holes — and resulting in only a marginal drop in average grade from a 2011 inferred resource.

Edgewater has defined six distinct zones at the site, including: Picotos, Fonterremula, Montefurado, Pozo del Ingles, Peton de Lobo and Cova Crea. The general strike of the mineralized bodies is northeast, and they dip to the north in accordance with a main regional lithological trend and extensional shear zones.

Corcoesto’s global measured and indicated resources now total 24 million tonnes grading 1.32 grams gold per tonne for 1.03 million contained oz. at a 0.5 gram gold cut-off. The company points out that under a 0.8 gram gold cut-off, its pit-constrained measured and indicated resource totals 16.2 million tonnes grading 1.65 gram gold for 863,000 contained oz.

“Over the past two years, our infill drilling program at Corcoesto has confirmed and successfully converted a significant amount of inferred resources,” commented president and CEO George Salamis, noting that the resource now exceeds a target established in the company’s 2011 preliminary economic assessment (PEA).

“The gold resource remains open highlighting the potential to increase the overall size of the Corcoesto gold resource in all categories, with all three of the main zones remaining open for expansion [at depth] and on strike. Pending the outcome of the final feasibility study we believe this updated resource will enhance the potential project life and increase long-term, sustainable benefits to our stakeholders in the region,” he added.

Edgewater released its PEA just over two years ago, with the company modelling a US$135-million operation that would produce 102,000 oz. gold annually over a 10 year life at average costs of US$713 per oz.

The mine study assumes a hybrid open-pit and underground plan based largely on inferred resources that totalled 20.3 million tonnes averaging 1.76 grams gold for 1.15 million contained oz. Open-pit cut-off grade were set at 0.65 gram gold, while underground ounces were constrained by a 2-gram gold cut-off.

It looks like Edgewater will do away with its underground scenario and target Corcoesto’s open-pit ounces. One of the more important tasks for the company has been dropping its stripping ratio, which sat at 8-to-1 under the original PEA. Much of Edgewater’s infill drilling has focused on targeting economic mineralization in between established zones that had previously been qualified as waste rock.

“Edgewater’s shareholders and the Corcoesto stakeholders have a valuable gold asset hosted in a first world jurisdiction,” Salamis continued. “In addition, all of us are benefitting from a demonstrated willingness shown by all levels of government and the local communities to help see Corcoesto through to development and gold production.”

Edgewater received its environmental impact statement for Corcoesto in December, and the Ministry of Economy and Industry in Galicia requested final requirements for the project in mid-July.

During the review process the Galician government reviews the environmental, technical and economic aspects of each project. It is worth noting that Spain does not require federal approval for the project, thus making regional permits Edgewater’s final requirement prior to construction. The company expects the review to proceed following the release of its feasibility study.

Edgewater reported working capital of US$5 million to end the first quarter, and has traded within a 52-week range of 8¢ to 54¢. The company bounced off a yearly low in mid-July following news of its final permitting reviews, jumping 50% over the past four weeks en route to a 15¢ close at press time. Edgewater maintains 89 million shares outstanding for a $13-million market capitalization.