Meridian Mining hopes to boost resource at Cabaçal with new gold vein

Meridian Mining (TSXV: MNO; US-OTC: MRRDF) has reported the discovery of a new high-grade gold vein at the northwest extension of its Cabaçal copper-gold project at Mato Grosso in west-central Brazil, ahead of the project’s new resource estimate planned for September.

The high-grade gold vein returned an intercept of 16.7 grams gold per tonne,3.6 grams silver per tonne and 2.2% copper over 2.3 metres starting from 21 metres in drill hole CD-147, and the company says the drill hole “provides yet another example of a new high-grade domain found within the prospective 1,250 metre strike length of the Cabacal Northwest Extension (CNWE).”

“The Cabaçal Northwest extension is now confirmed to host multiple vein sets of very high-grade gold overprinting the copper-gold VMS system, and we are confident more veins will be delineated,” the company’s CEO Adrian McArthur said in a press release.

“The strength of a new 2.3-metre gold vein grading at over half-an-ounce gold is significant, in being one of a new array of structures identified over the length of the Cabaçal’s northwest extension.”

Another hole, CD-142, extended the company’s gold-silver discovery, called C4A, by 50 metres to the northwest along strike. Hole CD-142 cut 45.7 metres grading 1.8 grams gold per tonne and 33.7 grams silver per tonne over 10.7 metres starting 45.7 metres downhole.

“This hole was drilled to 253 metres, intersecting strong alteration with periodic sulphide mineralization that may point to a previously unknown VMS centre,” Craig Stanley, a mining analyst at Raymond James, commented in a research note. “C4-A lies at the northern end of a 3.5 km trend that hosts multiple gold-in-soil anomalies with coincident IP anomalies that extends to the southeast.”

The C4A prospect is 2 km southeast of the past-producing Cabacal mine, is open in all directions, and is, Stanley says, “a new style of mineralization at Cabacal highlighted by precious metals with little to no base metals.”

The project was discovered in 1983 by BP Minerals and acquired by Rio Tinto in 1989.

Cabaçal contains two historical underground mines (Cabacal and Santa Helena) that produced about 34 million lb. of copper, 170,108 oz. of gold, 1.03 million oz. silver and 103 million lb. of zinc through conventional flotation and gravity metallurgical processes, the company said.

In 2020, Meridian entered into an option agreement with a group of private Brazilian companies that allows iy to acquire 100% of the project for a total consideration of $8.8 million and 4.5 million Meridian shares. The company is  in the process of fulfilling the third of seven installments outlined in the agreement.

The property hosts a historic resource of 21.7 million tonnes grading 0.6% copper and 0.6 gram gold per tonne, which was completed by a previous owner in 2009.

According to Meridian, the broad intervals of copper and gold mineralization are “significantly in excess of the narrow mineral historical resource envelopes,” and are expected to boost the Cabaçal’s first resource estimate.

The company has three drill rigs turning at the project.

“Drilling is planned to continue and will necessarily need to include holes to close out the limit of mineralization to optimize the definition of resources accessible to potential open-pit development,” Meridian said.

Raymond James’ Stanley says he believes Meridian will “significantly improve” the size of the historic resource due to “results from the company’s drill program, historic drilling not available to the vendor resource calculation, as well as incorporating higher metal prices and metallurgical recoveries.”

“Meridian has drilled later-stage vertical structures that overprint the shallow dipping VMS stratigraphy. These structures were seen in underground workings but historic, widely spaced, vertical drilling was not optimal to intersect these zones, and they were not included in the historic resource calculation,” Stanley wrote in a research note to clients.

At Midday in Toronto, Meridian Mining was trading at 58¢ per share within a 52-week trading range of 38.5¢ and C$1.34. The company has 166.4 million common shares outstanding for a market cap of $91.5million.