Xmet boosts inferred resource at Duquesne-Ottoman by 56%

Gold exploration company Xmet (CVE:XME) Thursday announced a 56% increase in NI 43-101 mineral resources at its Duquesne-Ottoman property, near Rouyn-Noranda in Quebec.
In a statement, Xmet said Duquesne-Ottoman now has NI 43-101 compliant inferred resources of 4.17 million tonnes at an average grade of 5.42 grams per tonne (g/t) gold (6.36 g/t Au uncut), hosting 727,000 cut ounces of gold and 853,000 uncut ounces of gold.
The resource estimate was carried out by Watts, Griffis McOuat (WGM). It used a cut-off grade of 3.0 g/t Au over a 2.5m minimum horizontal width.
This latest report compares with the 2.73 million tonnes of inferred resources announced last November, at an average grade of 5.29 g/t gold (6.00 g/t Au uncut), hosting 465,000 ounces gold cut and 525,000 ounces of gold uncut.
The substantial boost is a result of the company's phase one drilling program, which totaled 13,000 metres, and was completed in April. Highlights from this campaign included 3.20 g/t gold over 8.10 metres in hole DO-11-20 at the 20-20 Zone, and 6.65 g/t gold over 7.7 metres, including 10.01 g/t gold over 4.3 metres in hole DO-10-05.
Xmet said the phase one results demonstrate there is excellent potential to develop additional resources amenable to underground extraction below the areas identified in the current mineral resource estimate.
Speaking to Proactive Investors, President and COO Charles Baudry said: "We under-promised and over-delivered, we were always confident we could deliver on guidance."
Baudry said that since all eight zones included in the resource remain open, he was confident that the company can "expand beyond" today's estimate, highlighting the "interesting widths" on the property, particularly at the Fox and Liz zones, which had respective average widths of 5.4 metres and 7.3 metres. Widths are generally key to narrow vein resources.
Senior VP of Exploration, Bill Yeomans, added: "Our all-inclusive cost for the Phase 1 drill program, including our rebate from the Quebec Exploration Refund Incentive Program, was approximately $1.3 million dollars."
"Our highly skilled exploration and management team generated an additional 328,000 ounces during the first 12 months of drilling and exploration at Duquesne-Ottoman, for an all-inclusive discovery-cost of less than $4.00 per ounce," Yeomans said.
Indeed, the phase one drill program uncovered three new zones of the eight that currently host the gold mineralization at the site.
The company said its phase two drill program will start imminently, targeting further resource expansion on the property.
Baudry said that in this next phase, the company will shallow drill the Shaft zone at an angle to identify the near-surface resource. Earlier this week, Xmet said that it intersected 13.3 grams per tonne (g/t) gold in a surface stripping and sampling program at Duquesne-Ottoman, showing evidence of continuation of mineralization.
The project is located approximately 50 kilometres north of Rouyn-Noranda in northwestern Quebec and is immediately adjacent to three past-producing mines held by Clifton Star (CVE:CFO).
Xmet, as operator, can earn a 75% interest in the Duquesne-Ottoman property from Globex Mining Enterprises (TSE:GMX) by investing a total of $8.2 million in exploration and making cash payments totalling $7.08 million over six years.
A total of 22,749 samples in 135 drill holes, representing approximately 66,750 metres of drilling were used for the estimate. All the drilling used for the estimate was done in the period from 1994-2011.
The eight zones hosting the gold mineralization remain open at depth and in some cases along strike and up dip.