Friday, 1 February 2013

Meadow Bay Gold surges after new resource doubles gold ounces at Atlanta project - UPDATE


Shares in Meadow Bay Gold (TSE:MAY) surged 27% Wednesday after the company unveiled an NI43-101 resource for its Atlanta Gold project, which has doubled gold ounces.
The company's stock jumped almost 30% this morning, or by 12.5 cents, to 55 cents. So far this year, its shares have more than doubled in price.
There are now 572,100 ounces of the yellow metal in the higher measured and indicated category, and 544,300 ounces of gold in inferred.
That compares with the estimate in July last year, of 375,869 ounces in indicated and 166,141 ounces of inferred.
The overall measured and indicated resource now stands at 15.5 million tons at a gold grade of 0.037 g/t, while the inferred resource is 18.5 million tons at 0.029 g/t of the yellow metal.
The Atlanta resource also contains 5.8 million ounces of silver in measured and indicated and 3.9 mln ounces silver in the lower inferred category.
Consultants estimated the resource based on 34,919 feet of drilling in 21 core holes and 22 RC holes conducted by Meadow Bay in 2011 and 2012 as well as historical drill data.
Chief executive Robert Dinning told investors: "In the two years since Meadow Bay acquired the Atlanta project we have more than doubled the resource. 
"And we did this at a discovery cost of under $10 per ounce. Based on the model put together by Gustavson Associates, we are confident that we can build upon this resource through additional cost-effective exploration."
The Atlanta project in eastern Nevada is host to the historic Atlanta Mine, which saw small-scale production by Standard Slag from 1975 to 1985 before it was shut down due to low gold prices. 
Since acquiring the project in 2011, the company has conducted two rounds of drilling at the property. It has also acquired most of the remaining ground in the district and has identified new exploration targets.
Recent drilling results from the project include one hole that yielded 2.25 g/t over 67 metres, and others that returned 2.12 g/t gold and 5.3 g/t silver over a width of 35.06 metres, and 9.15 metres at 6.21 g/t gold and 15.8 g/t silver. 

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