Maritime finds more shallow gold at Hammerdown

Definition drilling at the former Hammerdown mine in Newfoundland and Labrador has returned high grades within metres of surface, Maritime Resources (TSXV: MAE; US-OTC: MRTMF) reported Monday.

Highlights included 41.6 grams gold per tonne over 6.3 metres, including 127.5 grams gold over 2 metres, starting from 3.7 metres downhole in HDGC-24-038. Other notable assays were 6.8 grams gold over 17.0 metres, including 30.6 grams gold over 2 metres starting from 26 metres in HDGC-25-104 and 26 grams gold over 0.7 metre starting from 41 metres downhole in HDGC-24-003.

“The high-grade gold mineralization occurs just below surface and demonstrates the potential to generate significant cash flow quickly from the project,” President and CEO Garett Macdonald said in a release.

Hammerdown, in the Baie Verte mining district about 500 km west of the provincial capital St. John’s, operated as an open pit then underground operation, producing about 143,000 oz. gold from 2000 to 2004. Maritime currently plans to mine Hammerdown as a high-grade open pit.

Shares in Maritime Resources closed flat at 7.5¢ apiece in Toronto on Monday, valuing the company at $58.4 million. They’ve traded in a 52-week range of 3.5¢ to 8¢.

US75M capex

A 2022 feasibility study outlined a mine life of five years producing an average of 50,000 oz. gold a year. Initial capital was pegged at US$75 million, with a 1.7-year payback period at a gold price of US$1,750 per ounce.

The feasibility forecast an after-tax net present value (at a 5% discount rate) of US$102.8 million and an internal rate of return of 48.1%. All-in sustaining costs were pegged at US$912 per ounce.

The study was based on an onsite crushing and ore sorting stage at the Hammerdown mine site that would remove dilution and concentrate the run-of-mine ore into a high-grade feed product that would be trucked to the company’s Nugget Pond mill, 140 km away.

After the study was completed, the company in 2023 acquired the Pine Cove mill near Baie Verte, just 40 km from Hammerdown. With the addition of Pine Cove, initial capital costs will be “greatly” reduced compared to the estimate in the feasibility study, the company stated in a corporate presentation in January. Maritime estimates capital costs closer to US$15-20 million for initial production at 700 tonnes per day.

Pine Cove, rated for 1,300 tonnes per day, had been on care and maintenance since March 2023, and has a fully permitted gold circuit and a large capacity in-pit tailings storage facility. It is adjacent to deep water port infrastructure.

Old stockpiles

Maritime is recommissioning Pine Cove’s processing plant and plans to start processing mineralized stockpiles left behind after years of mining. The company estimates the stockpiles total about 85,000 to 115,000 tonnes grading 1.1 grams gold for 3,000 to 4,000 oz. contained gold and says it likely will start processing the material before the end of February.

In the open pit category, Hammerdown has 2.85 million measured and indicated resources grading 3.6 grams gold per tonne for 330,000 oz. contained gold, and another 302,000 inferred tonnes grading 1.31 grams gold for 13,000 ounces.

In the underground category, the deposit contains 55,000 measured and indicated tonnes averaging 5.10 grams gold for 9,000 gold ounces and another 66,000 inferred tonnes grading 4.0 grams gold for 9,000 ounces.

Maritime notes that mineralization extends well below the historic open pit mine.

Approvals

Last February, Newfoundland and Labrador’s Department of Industry, Energy and Technology approved Maritime’s closure and development plans for Hammerdown last February.

In terms of exploration opportunities at the project, there are three new open pit targets within the Hammerdown area—Orion (gold), Lochinvar volcanogenic massive sulphide (zinc, copper, silver, gold) and Area 22 (gold), as well as other exploration targets within a five km radius of the Hammerdown deposit.

Australia’s Firefly Metals (ASX: FFM; TSX: FFM) took an 8.95% stake in the company last March. Dundee Corp. (TSX: DC.A) owns approximately 43% of the company.

Maritime’s shares closed flat at 7.5¢ giving the junior a market cap of about $62 million. Over the last year Maritime has traded in a range of 3.5¢ and 8¢ a share.