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Thursday, 22 August 2013
Spanish Mountain looks to boost grade and confidence of Main Zone
Spanish Mountain Gold (TSX-V:SPA) announced this morning that it had embarked on a 10,000 meter drill program aimed at potentially improving grade within a test block area of the main pit.
The company has already delineated a measured and indicated resource of 216 million tonnes averaging 0.46 grams per tonne of gold and 0.68 grams per tonne of silver, or 3.18 million ounces of gold and 4.73 million ounces of silver at Spanish Mountain. There is also an additional 316 million tonnes in the inferred category at a lower grade of .36 grams per tonne gold and 0.65 grams per tonne silver, After reviewing results from past reverse-circulation and diamond drill assays, the company's geologists noted that it appeared there may be some loss of grade with the diamond drill holes compared to reverse circulation holes which is not all that uncommon when drilling lower grade deposits.
With approximately $2.7 million in flow funds raised in December, it was decided by management that directing funds to test this hypothesis would be money well spent - any improvement in the overall grade of the deposit could have a significant impact on the overall economics - especially critical in the current environment for gold projects seeking development capital.
Spanish Mountain will be drilling right in the heart of the envisaged starter pit at Spanish Mountain, drilling at least 10,000 meters to an indicated resource level. If the grade improves at the same time, it would be a significant milestone for the company.
“If this program achieves a reasonable grade increase it could potentially lead to a significant improvement in the project economics," Colin Clancy, head of Corporate Communications told Proactiveinvestors this morning. “Considering the current market conditions management believes this program provides the best opportunity to potentially add significant value at minimal cost to the shareholders.”
Spanish Mountain also noted that a second phase is expected to immediately follow, to expand beyond the area of the test block and will "conform as closely as possible to the initial phases of potential pit development proposed in Preliminary Economic Assessment."
Future developments for Spanish mountain gold will be a reclassification program designed to move approximately 20% of the inpit resource from inferred to M&I with the intent of starting a full feasibility study in 2014.