Gold-Ore boosts Bjorkdal resource (January 21, 2011)

The overall resource at Gold-Ore Resources‘ (GOZ-T) Bjorkdal gold mine in Sweden has grown by over 50% from the last estimate reported in March 2010.

Measured and indicated resources for the combined open pit and underground operation totals 921,000 oz., based on an independently estimated 16.5 million tonnes grading 1.74 grams gold per tonne. Inferred resources hold an additional 615,000 oz. in 13.2 million tonnes grading 1.45 grams gold.

“The updated mineral resource estimate confirms that Bjorkdal is a significant gold deposit, with over one million ounces produced and over 900,000 oz. in the measured and indicated resources category,” said Gold-Ore’s President Robert Wasylyshyn in a prepared statement.

“Our drilling continues to expand the known limits of the deposit and the mineralized vein swarm remains open to expansion in several directions. An on-going aggressive, widely-spaced underground drill program intersected gold mineralized veins over a broad, on-strike area,” he added.

The Bjorkdal mine reached a noteworthy milestone in September 2010 when it produced its one millionth ounce of gold, a significant achievement for a mine that has struggled through weak gold prices of the late 1990s.

Since acquiring the mine in 2006, Gold-Ore has more than doubled production by restarting operations in the open-pit and by going underground on the deposit, chasing the downward plunge of the gold-bearing quartz veins using long-hole stope mining methods. An underground network of tunnels and drifts are accessible from two declines at the floor of the pit.

Located near the town of Skelleftea in northern Sweden, the mine produced a record 41,051 oz. gold for Gold-Ore’s 2010 fiscal year. This represented an 11% increase over 2009, the company’s first year of commercial production.

The mill, which uses a combination of gravity and flotation circuits to recover the gold, averaged a daily throughput of 3,177 tonnes at a head grade of 1.24 grams gold for a recovery rate of 88.8%.

During November, Bjorkdal set a new monthly record by producing 4,177 oz. gold, surpassing the previous record of 4,059 oz. set in May 2010. The mine is cash flow positive and unhedged.

The company’s annual financial results are expected to be posted before the end of February. With 84.4 million shares outstanding, or 89 million fully diluted, the stock is currently trading around 93 cents in a 52-week range of $0.36-1.14.