Omai reports wide gold zones at WeNot in Guyana

Omai Gold Mines’ (TSXV: OMG) shares jumped 14.3% on Wednesday after the junior reported high-grade drill results from its WeNot deposit in Guyana.

Highlights from WeNot, one of two deposits at the past-producing Omai gold project, included drillhole 24ODD-085, which intersected 68.7 metres grading 3.16 grams gold per tonne from 451 metres downhole, including 6.65 grams gold over 30 metres.

Drillhole 24ODD-087 cut 45.5 metres grading 4.57 grams gold from 497 metres depth, including 38 metres of 2.4 grams gold and 1.5 metres of 77.71 grams gold. Other notable intercepts in the hole included 2.5 metres at 19.36 grams gold from 202 metres.

“The very significant widths and robust gold grades further demonstrate that the gold zones at WeNot increase in width and grade with depth,” Omai CEO and president Elaine Ellingham said in a release.

Omai shares traded at 20¢ apiece on Wednesday, valuing the company at $100.8 million. Its shares traded in a 52-week range of 5¢ to 21¢.

2.5-km-long deposit

The drill holes targeted the Dike Corridor, one of five main subparallel, near-vertical gold zones that make up the large 2.5-km-long WeNot deposit.

Omai is a brownfields project, the site of the past-producing Omai gold mine, which churned out about 3.8 million oz. at an average grade of 1.5 grams gold between 1993 and 2005. In that period, the Omai mine was the largest primary gold producer in South America, averaging over 300,000 oz. of gold a year, the company says. It was mined to a depth of 200 to 300 metres.

So far Omai’s drill program has confirmed that the WeNot shear zone extends to the west and east of the new WeNot deposit, by at least 900 metres and 400 metres respectively, well outside of the previously mined area. The company notes that this suggests an exploration target at least 2.7 km long by 450 metres deep and 200 to 300 metres wide.

WeNot contains 17.6 million indicated tonnes grading 1.48 grams gold for 834,000 oz. contained gold and another 25.18 million inferred tonnes grading 1.99 grams gold for 1.6 million oz. contained gold.

A preliminary economic assessment (PEA) in April envisioned an open pit mine averaging 142,000 oz. gold a year over a 13-year mine life for life-of-mine production of about 1.8 million gold oz. at an all-in sustaining cost of US$1,009 per oz. gold sold.

At a gold price of US$2,200 per oz., the project offers an after-tax net present value (at a 5% discount rate) of US$777 million and an internal rate of return of 24.7%. Initial capex of US$375 million could be repaid in 3.5 years.

At a base case gold price of US$1,950 per oz., the after-tax NPV comes to US$556.4 million and IRR to 19.8%.

An adjacent deposit called Gilt Creek was not included in the PEA because it will be mined from underground. Gilt Creek hosts 11.1 million indicated tonnes grading 3.22 grams gold for 1.2 million oz. contained gold and 6.2 million inferred tonnes grading 3.35 grams gold for 665,000 oz. gold.

The Omai project is 165 km south-southwest of the capital city of Georgetown.