A reserve estimate for the Minnova Inc./Rea Gold Corp. Samatosum property near Kamloops, B.C., will probably be ready by late August. More drilling will be required, though, to fully delineate the discovery and a new program could get under way this September, The Northern Miner has learned. In the meantime, Dean Witter Canada has prepared a highly favorable investment review of Rae Gold which, based on certain assumptions, concludes the company’s common shares are relatively undervalued. “Our conservative upside price target is $12 under existing market conditions for silver and silver equities,” the report states.
Dean Witter recently acted as Rea Gold’s agent for a flow- through offering which is expected to raise almost $2 million for exploration work on its Canadian properties. Minnova has not released much detailed information on the property so the report should probably be considered somewhat speculative.
Dean Witter estimates reserves at 970,000 tons grading 27.2 oz silver, 0.038 oz gold, 1% copper, 1.45% lead, and 2.8% zinc. This would be sufficient for 6.5 years of operation at “500 tons per day during the open pit phase and 400 tons per day during the underground phase.
“Although a production decision has not yet been announced, the richness of the deposit assures a favorable decision, probably towards the end of the current year,” the report concludes.
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