The Batman deposit at the Mt. Todd project in northern Australia has 1.1 million more ounces of gold in the measured and indicated categories than originally thought, Vista Gold (VGZ-T, VGZ-X) reports.
An updated National Instrument 43-101 resource calculation on the large but low-grade deposit based on a cutoff grade of 0.50 gram gold per tonne reveals a measured and indicated resource of 89,280 tonnes grading 1.01 gram gold per tonne for a total of 2.89 million oz. gold.
In addition, the deposit has an inferred resource of 58,816 tonnes grading 0.81 gram gold per tonne contains 1.53 million oz. gold.
The new resource calculation was based on the results of 9,460 assay intervals from 25 holes that Vista drilled last year, as well as the results of 91,224 assay intervals from 730 holes previously drilled by BHP Resources, Zapopan and Pegasus Gold Australia and used in the previous 2006 resource estimate.
The Batman gold prospect, 3.5 km west of Mt. Todd, is part of a goldfield that was worked from early in the 20th century. (Gold and tin were discovered in the area as early as 1889.)
Vista Gold’s Mt. Todd mine property contains several gold deposits across a 54-sq.-km area. The two most prominent are the Batman and Quigleys deposits.
Quiqleys, about 4,000 metres northeast of Batman, does not yet have a resource estimate.
Vista Gold purchased the Mt. Todd gold project, about 250 km southeast of Darwin in Australia’s northern territory, in June 2006.
Pegasus Gold Australia operated the Mt. Todd mine from 1993 to 1997, and from 1999 to 2000 it was run by a joint venture between Multiplex Resources and General Gold Resources.
But the mine closed in November 1997 and again in 2000 due to a combination of low gold prices (the gold spot price slumped from above US$400 per oz. in early 1996 to below US$300 per oz. during 1997) and higher than expected operating costs (due to several technical problems including improper crushing and grinding).
In terms of geology, the project is situated within the southeastern portion of the Early Proterozoic Pine Creek Geosyncline. Meta-sediments, granitoids, basic intrusives, acid and intermediate volcanic rocks occur within the geological province.
The Batman deposit consists of a sequence of hornfelsed interbedded greywackes, and shales with minor thin beds of felsic tuff.
Prior to the new resource calculation, a preliminary assessment on the Mt. Todd project completed last year showed that 266,000 oz. gold and 4.3 million lbs copper (with a US$32 per gold oz. copper credit at copper prices of US$2 per lb) could be produced annually over a 10-year life at a production rate of 30,000 tonnes per day.
Under that scenario, the mine would yield total production of nearly 2.7 million oz. gold and nearly 43 million lbs of copper at an average operating cost of US$391 per oz. gold net of copper credits.
In Toronto, Vista Gold is trading at about $5.50 a share and has a 52-week trading range of $3.04 to $10.36.
On the American Stock Exchange, Vista Gold is trading at about US$5.62 a share with a market capitalization of US$185.2 million.
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