Coastal Gold (TSXV: COD; US-OTC: COGGF) updated the resource for its Hope Brook gold project on the southwestern coast of Newfoundland today with grades in the indicated category averaging 1.93 g/t Au – 30.2% higher than in the previous estimate completed in Oct. 2012.
Nearly 90% of the indicated resource lies within a potential open pit at a cut-off grade of 0.70 g/t Au and the deposit is open along strike to the southwest and down dip.
Based on a 5,951 metre diamond drill program in the fall of 2012 and another 4,075 metre drill program from September to November of this year, the revised estimate puts total indicated resources at 19.95 million tonnes averaging 1.93 g/t Au per tonne for 1.24 million oz of contained gold. Inferred resources add 1.33 million tonnes grading 3.22 g/t Au per tonne for 138,000 oz of contained gold.
The company plans to complete a preliminary economic assessment in early 2014.
The Selco Division of BP Resources Canada discovered Hope Brook in 1983, after which the deposit produced – under two separate owners – a total of 752,163 oz of gold from combined open pit and underground operations between 1987 and 1997. A subsidiary of BP Resources operated the mine from 1987 to 1991, and Royal Oak Mines operated it between 1992 and 1997.
Coastal Gold, which changed its name from Castillian Resources in June 2013, describes Hope Brook as a high sulphidation gold deposit “formed from a long lived magmatic hydrothermal system” with an alteration pattern that it believes is similar to large-scale epithermal systems.
In a corporate presentation it also notes that there is “considerable upside for outlining additional higher grade mineralization within extensive lower grade mineralization.”
The deposit is hosted by pyritic silicified zones occurring within a deformed, strike extensive advanced argillic alteration zone characterized by the presence of silica, sericite, pyrophyillite, kaolinite, alunite, pyrite, chalcopyrite and gold, according to the company’s technical report on the project.
The 21 hole drill program in the fall of 2012 identified a major new surface target zone in what the company is calling the Connector zone, just 900 metres southwest of the former mine. Coastal Gold’s geologists interpret the thickness of the Connector zone alteration as being similar to that of the former mine and its 240 zone.
On Nov. 27, Coastal Gold released assay results from a Vibracore drill program of two tailings ponds at the former producing mine, which showed widespread gold and copper mineralization significantly above the historic reported tailings grade and the company says it will complete a mineral resource on the tailings.
The company is considering using the existing tailings material as potential mill feed to either supplement the run-of-mine material or to provide stand-alone early feed for the project. A total of 73 Vibracore drill holes totalling 155 metres were completed on roughly a 100-metre-square grid over the two tailings ponds.
Highlights from drilling the first tailings pond included 1.73 g/t Au and 0.12% Cu over 2.39 metres from hole P8; 1.31 g/t Au and 0.18% Cu over 4.20 metres from hole P13; and 1.32 g/t Au and 0.13% Cu over 1.17 metres in hole P3.
Drill highlights from the second tailings pond included 1.40 g/t Au and 0.08% Cu over 3.29 metres from Hole P47, 1.12 g/t Au and 0.08% Cu over 3.77 metres from hole P52, and 1.08 g/t Au and 0.05% Cu over 5.05 metres from hole P64.
Drill holes from the first tailings pond are generally higher grade, most likely because most of the tailings in pond one are reported to be from the earlier years of production when the historic mill lacked a copper flotation circuit for production of a copper concentrate hence had lower reported overall recovery. Most of the tailings in pond two are reported to have been from the latter years of production when the plant recovery was higher due to the addition of the copper flotation circuit.
The Vibracore drilling program is a low impact coring method that allows for recovery of unconsolidated sediments using a 100 mm diameter aluminum core tube, the company explains on its website. The tailings core were logged, photographed and then split in half with one half sent to the laboratory for analysis and the other half retained and stored on site.
The Hope Brook project is about 85 km by water east of the community of Port aux Basques, the year-round terminus for the CN Marine ferry service that connects the island of Newfoundland with mainland Canada at North Sydney, NS, and it was used as the marine service center for the Hope Brook mine operations. Burgeo, a coastal community 50 km east of the project has access to the Trans-Canada Highway.
Direct access to the project can be by chartered boat from either the Burgeo or Port aux Basques areas. The most efficient means of access however is by charter fixed-wing aircraft or helicopter from commercial bases in the Deer Lake-Pasadena area, about 20 km to the north.
Some infrastructure from the previous mine still exists, including access to the provincial power grid through an existing transmission line.
Environmental reclamation of the Hope Brook site was not completed by Royal Oak Mines because the company went bankrupt in April 1999. The government of Newfoundland was then awarded ownership of the site and remaining infrastructure. The government undertook a major reclamation effort between 2001 and 2004, which included environmental assessments and monitoring, the removal of site infrastructure, the upgrading of tailings dams and other water control structures. Provincial authorities also put acid generating waste rock and remaining heap leach pad materials in the water filled open pit, capped landfill sites, decommissioned hydro and communication services, installed fencing around the open pit and set up ongoing watershed and tailings dam structural monitoring systems.
At press time in Toronto Coastal Gold was trading at 2.5 cents per share within a 52-week range of 1.5 cents and 15 cents. The junior has about 131 million shares outstanding.
To go to the Northern Miner website, click here
Comments