Omai doubles Guyana gold resource

Guyana-focused Omai Gold Mines (TSXV: OMG) has reported a near-doubling of the resource base after releasing a new resource estimate for its namesake gold project.

The new resource update incorporates an expansion of the Wenot pit and adds the Gilt Creek deposit.

The indicated resource grew 171% over the 2021 estimate to 1.9 million oz. gold held in 16.7 million tonnes grading 2.07 grams per tonne. The inferred resource jumped 89% to 19.5 million tonnes grading 2.1 grams gold per tonne for 1.8 million oz.

In total, Omai now holds a comprehensive resource of 3.69 million oz. grading at 2.08 grams per tonne, more than doubling the previous resource of 1.64 million oz. grading at 1.42 grams per tonne released at the beginning of 2022.

The newly included Gilt Creek deposit is 500 meters north of the Wenot deposit, below the Fennell pit, which historically produced 2.4 million oz. The company reports that it incorporates geological data from 46 diamond drill holes totalling 27,997 metres.

Using an underground mining method for this deposit, the resource outlines 1.15 million oz. of gold grading 3.22 grams per tonne in the indicated category and 665,000 oz. grading 3.35 grams per tonne inferred.

Omai says the Gilt Creek deposit is partially responsible for the significant increase in grade in the updated MRE and offers potential for expansion laterally and at depth.

For the Wenot pit, the new resource estimate incorporates the nine additional diamond drill holes completed in 2022 for a total of 81,991 metres from 579 drill holes.

The pit now hosts 756,000 oz. of gold (an 8% increase) grading 1.34 grams gold per tonne (2% increase) in the indicated category and 1.1 million oz. gold (18% increase) grading 1.72 grams per tonne inferred (15% increase).

Looking ahead, Laurentian Bank Securities Equity Research expects the remainder of the year and into 2023 to see Omai focus on further exploration, balanced between defining new targets with high potential for discoveries, and continuously growing the Wenot and Gilt Greek resource in the short term.

The company is currently undertaking geochemical surveying on the eastern extension of the Wenot shear corridor, as well as trenching on the Broccoli Hill regional target.

“We’ve adjusted our resource inventory for Omai to reflect the new MRE as well as reduced our valuation multiple from $50 to $30 per oz. to reflect multiple compression across the gold exploration space,” wrote mining analyst Ryan Hanley in a note to clients.

“Net-net, our NAV increases slightly to 37¢ from 36¢ per share. As a result, our 40¢ per share target and ‘speculative buy’ rating remain unchanged as we continue to see strong exploration upside, despite the difficult market conditions, specifically for junior gold exploration companies,” said the analyst.

Omai had previously been in production from 1992 to 2005 under Cambior (which merged with Iamgold (TSX IMG; NYSE: IAG) in 2006) and yielded 3.7 million oz. of gold from the Fennell and Wenot open pits.

Following the acquisition of the project in 2019 and the subsequent completion of a reverse takeover in 2020, Omai is now focused on exploring outside of the historic open pits and other nearby exploration targets.

Omai equity closed half a cent, or 10%, higher at 5.5¢ per share on Thursday, giving it a market cap of $16 million. It has lost more than 47% in value over the past 12 months.