Romarco tops 4M oz. gold at Haile

Romarco Minerals (R-T) has boosted the resource at its Haile gold project in South Carolina by 29% after concluding a 118,000-metre step-out drill program in November. 

Haile’s measured and indicated resource now totals 71 million tonnes grading 1.77 grams gold per tonne, or 4 million contained oz. gold, up 916,000 oz. from the previous estimate in December 2010.

Using a US$1,200-per-oz. gold price, the updated resource has a large portion of previously inferred, deep mineralization at the Horseshoe and Mustang zones now feasible in the open-pit shell model, resulting in more measured and indicated resources.

Romarco hoped to begin pre-production last year after a February 2011 feasibility study on Haile showed a net present value of $693 million using a 5% discount rate and a US$1,300-per-oz. gold price.

In July 2011, however, the company received notice from the U.S. Army Corps of Engineers — the agency responsible for issuing the company’s 404 wetlands permit — that the project would require a full environmental impact statement, adding a year to the timeline. The delay helped Romarco’s shares sink from a 52-week high of $2.58 per share in March 2011 to a 90¢ per share low by late November.

Following the delay news, the company announced a step-out drill program that would encounter two new mineralized zones, named Horseshoe and Palomino, before the program’s completion in November 2011, as well as expanded sampling on the existing Mustang and Snake zones. 

 Romarco released assays from the drilling in early January, prior to updating the resource estimate. Highlights include:  hole 83 at Snake, with a 21-metre intersection of 43.1 grams per tonne gold; hole 404, an infill hole at Mustang with a 58 metres of 6.8 grams gold and 63 metres of 1.3 grams gold; and hole 144 at the new Horseshoe zone with 9 metres of 4 grams gold. The newest zone on site, Palomino, was highlighted by hole 139, at 85 metres with 3.4 grams gold. 

 The company says these findings indicate that the various gold zones on Haile belong to a single, major mineralized system.  

According to the February 2011 feasibility study, Haile is projected to have a capital cost of US$275 million, with an average cash cost of US$347 per oz. gold for the first five years of production. An updated technical update, expected by the end of March, will incorporate the new resource estimates as well as higher gold prices exceeding US$1,700 per oz.

Romarco hopes to have permit approval by late 2012 with construction beginning in early 2013, and gold production expected by first-quarter 2014. 

Romarco’s shares climbed back above $1 in the first two weeks of January, received another boost following the drill results and traded at a 4-month high of $1.41 before retreating to $1.14 at presstime.

Romarco has a $665.5 million market cap with 583.78 million shares outstanding.