Ocean Equities expects Belvedere Resources (CVE:BEL) to report a significant increase in the resource at its Osikonmaki joint venture gold project before the end of the year.
note from Ocean followed yesterday’s confirmation of a new high grade
gold discovery at the company’s Rantasalmi gold property in Finland.
Belvedere told investors that a recent drill programme at the Osikonmäki
East prospect’s Upper East HW zone had confirmed the initial find,
announced last year.
Drilling has continued to develop and extend
the Upper East HW zone and one of the holes was mineralised for almost
its entire 205 metre length.
This zone is now considered by Belvedere to be a significant new discovery.
Belvedere said it has identified the potential for a bulk tonnage
target, with what appears to be a zone of lower grade mineralisation
adjacent to the discovered high grade zone in the hanging wall.
Osikonmaki East prospect currently has an indicated resource estimate
68,000 ounces and an inferred resource estimate of 244,000 ounces of
Ocean analyst Christopher Welch expects delineation of the
higher grade zone in the east to quickly add ounces to the resource and
improve project economics.
He added the combination of the Upper
East hanging wall zone with a broader zone of lower grade mineralisation
means that the company will be able to start with preferential high
grade mining and evolve into a larger scale mining operation.
Belvedere could acquire more claims around the recent discoveries at
Osikonmaki, said Welch, noting that its geological team has a “great
understanding” of the gold distribution around its properties and could
quickly add value to new licences.
“Being in first place to
receive licences in areas of known gold mineralisation highlights the
potential of the company to grow into a substantial gold producer in an
area of low political risk,” said Welch.
The company funds its gold exploration projects with revenues from its Hitura nickel mine in Finland.
this year, the company extended its sales agreement with Jinchuan
Group, China’s largest nickel producer, de-risking the expansion phase
of the mine and securing funds for its gold assets including the Kopsa
Welch said a scoping study at Kopsa, which
is expected to start producing within the next two years, would be
supportive for Belvedere’s share price.
According to Welch, with a
market cap of C$18 million, the company is undervalued based on either
its nickel mining or its gold exploration operations.
some debate regarding the complexity of operating both areas of the
business at the same time, but it is clear that the team has been able
to turn profit at Hitura into gold discoveries at its joint venture
projects,” said Welch.
“Osikonmaki has been a priority for the
company during the initial stages of the joint venture, and the team has
successfully led the exploration campaign.
“Now Belvedere can
look to add value to its other gold asset and deploy the profit from its
nickel operations to purely serve its own shareholders.”