Major resource increase for Majestic’s Song Jiaguo

Majestic Gold (MJS-V) has more than doubled indicated resources at its Song Jiaguo gold project in Shandong province, China.

Indicated resources for the open-pit mining operation have increased by 138% in tonnage and 112% in contained gold.

Indicated resources are 24.9 million tonnes grading 1.25 grams gold per tonne for 1 million oz. gold. Inferred resources are 28.1 million tonnes at 1.88 grams gold for 1.7 million oz. gold.

The last resource estimate was tallied in 2007. This new one takes into account more-recent surface drilling and trenching, as well the depletion of mined ore since then.

Majestic is working on a prefeasibility study for the project with Wardrop Engineering, with the goal of expanding the current mine from a 1,400-tonne-per-day open-pit and underground operation to a 5,000-tonne-per-day open pit only.

Majestic also aims to buy the remaining 40% of Song Jiaguo.

The project is located on the western edge of the Muping-Fushan gold belt, which hosts about 20% of the known gold deposits on the Jiaodong peninsula. Gold production from this entire peninsula accounts for more than a quarter of China’s annual gold production — about 9.3 million oz.

Gold mineralization at Song Jiaguo is hosted by steeply dipping, sub-parallel north-northeast trending fault zones within upper Cretaceous conglomerates overlying Proterozoic granitic rocks.

Majestic shares recently traded at 13.5¢, in a 52-week range of 2¢-27¢. The company has 228.3 million shares outstanding.