Mutiny Gold (ASX: MYG) is eyeing the dual objectives of a resource upgrade to support expansion of the Deflector gold copper project, along with a deposit extension, after commencing a 12,000 metre reverse circulation and diamond drilling program.
Why this new program at Northern Deflector is so anticipated, which astute investors will remember, is that drilling in this area in September delivered the stunning 3.6 metres at 153 grams per tonne (g/t) gold and 13.3% copper intersection.
The new drilling by Mutiny is aiming to deliver results which would potentially allow production capacity to be increased beyond 100,000 ounces of gold per annum.
Drilling will focus on extensions along strike at the Central and Contact lodes, with infill drilling targeting an improvement in the quality of the resource estimate - which in turn could boost the phase of scheduled mine production.
Deflector currently has a resource of Measured and Indicated of 2.1 million tonnes at 5.2g/t gold for 350,000 ounces, 1.1% copper for 22,000 tonnes and 7.3g/t silver for 490,000 ounces. Inferred is 1.3 million tonnes at 4.5g/t gold for 180,000 ounces, 0.5% copper for 6,000 tonnes and 6.2g/t silver for 130,000 ounces.
Mutiny is now eyeing Reserves to be added into the Definitive Feasibility Study by mid-February 2012.
Credit Suisse funding facility highlights confidence in Deflector
Providing a major vote of confidence in the Deflector operations, Mutiny has already entered into a $11 million project loan and hedging facility agreement with Credit Suisse.
As part of the facility Mutiny will forward sell 50,000 gold ounces, and recently announced the average price of A$1,847 per ounce - which is above historical Australian gold pricing.
Importantly this forward sale represents less that 10% of Mutiny’s current JORC gold resource. Under the agreement Mutiny will deliver gold to Credit Suisse over the period July 2013 to December 2016.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/23529/mutiny-gold-new-drilling-at-deflector-near-stunning-36m-at-153gt-gold-and-133-copper-23529.html
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