Clifton Star Resources (CVE:CFO) unveiled Thursday the first 3D block model and integrated resource estimate for its Duparquet project in Quebec, while includes the Beattie tailings resource.
Shares rallied nearly 12 per cent to $1.03 Thursday morning.
The NI 43-101 estimate, prepared by InnovExplo, will be filed on SEDAR in the coming weeks, the company said.
The previous resource estimates on the Duparquet project, which in
the past were completed on a separate deposit basis, only had resources
in the inferred category, while the new integrated estimate sees more
than half of all resources in the higher indicated category, on the
basis of contained ounces.
The total mineral resource consists of 1.71 million indicated ounces,
or 29.59 million tonnes at a grade of 1.80 grams per tonne (g/t) gold,
and 1.67 million inferred ounces, contained within 29.14 million tonnes
grading 1.78 g/t gold.
Measured resources also amount to 1,284 ounces, or 19,000 tonnes at a grade of 2.10 g/t gold.
The in-pit mineral resource contains 1.28 million indicated ounces
from 21.92 million tonnes at 1.81 g/t gold, and 1.14 million inferred
ounces from 23.15 million tonnes grading 1.53 g/t gold, both at a base
case cut off of 0.60 g/t gold.
"We are pleased to have put together the first comprehensive
geo-statistical estimate of resources for the Duparquet Project," said
president and CEO, Michel Bouchard.
"Close to half of the resources are now in the Indicated category and
most of the mineral resources are within the In-Pit shell. We can still
upgrade the resources category by definition drilling, and continue to
expand the zones with exploration drilling."
The estimate is based on 223 surface channel samples and 668 surface holes, totalling 211,259 metres, and 134,766 samples.
The company said gold recovery of 92.8 per cent was incorporated, based on recent metallurgical testing at SGS Lakefield.
Combined mining and milling costs of $24 per tonne were also used in
the Whittle open pit simulations, while a base case C$1380 per ounce
gold price and a cut-off grade of 0.60 g/t gold were used for
determining the in-pit resources.
The same 0.60 g/t gold cut-off was used for the Beattie tailings,
where most of the resource is in the indicated category, and includes
some measured resources, the company said. This tailings resource is
based on 258 holes and 450 samples.
For the underground mineral resource estimate, a 2.0 g/t cut-off and a minimum true thickness of 3 metres were used.
"The combined mining and milling costs used in the pit simulation for
the base case cut-off are conservative at $24/t, while the gold price
is based on the last 3 year average," continued Bouchard.
"The preliminary waste/ore ratio at around 8:1, but the offset is the
relatively high gold grade at Duparquet. Furthermore, preliminary
sensitivities studies indicate that lowering of mining and milling
costs, as well as pit design changes, could allow for a lower cut-off
and an increase in the resource."
Indeed, based on the current in-pit resource estimate, Bouchard said
Clifton Star will evaluate the factors in assessing the economic
potential of the Duparquet project through a preliminary economic
assessment - targeted for the end of 2012 assuming "normal consulting
Clifton Star has a come a long way recently and is one to watch,
according to mining research analyst Peter Campbell of Jennings Capital.
The Duparquet project is a multi-million ounce, open pit deposit with
scores of potential, making it a possible target for big gold producers
looking to de-risk their assets.
After almost eight months of hiatus, Clifton started fresh in March,
as the company resumed trading with president and CEO Bouchard, at the
helm, who took over from former chief executive Harry Miller in
Bouchard sees the recent $585 million Trelawney Mining acquisition by
Iamgold (TSE:IMG) (NYSE:IAG) as encouraging, as Trelawney is "maybe a
year ahead of Clifton, in terms of work sequence, in determining the
deposit it has at Côté Lake."
While Iamgold shelled out north of $70 an ounce in the ground for the
company, Clifton Star is valued at less than $20 an ounce, leaving
significant potential upside.
Duparquet is located along the prolific Destor-Porcupine fault in the Abitibi region of Quebec. Osisko Mining (TSE:OSK) dropped out of the joint venture at the project last year, which saw Clifton resume 100 percent control.
"The company has done a great job in advancing the project from what
it was when Osisko left," says Campbell, "and this is going to raise
people's attention to the asset."
Since March, the company has announced robust drill results, and
several metallurgical test results that indicate gold recoveries of 93
The new NI 43-101 compliant resource assessment report announced
today also goes a long way, allowing for one data bank for the whole
Drill results from 2012 at the project include 18 metres of 3.16 g/t
gold in hole BD10-160 ext, and 7 metres of 2.37 g/t gold in hole