Inferred resources at the Meliadine West gold project near Rankin Inlet, N.W.T., have increased by nearly two-thirds, to 6.5 million contained ounces.
WMC International, operator and 51%-owner of the project, now pegs the Wesmeg area at 23.7 million tonnes averaging 8.5 grams gold per tonne. The revised estimate is based on a cutoff grade of 3 grams and incorporates 38,000 metres of drilling completed in 1998.
The revision comes as good news to
Wesmeg consists of four separate but closely spaced deposits dubbed Tiriuniak, F, Pump and Wolf. Only Tiriuniak and F were included in the previous resource, a major portion of which was classified as indicated. WMC has since reclassified all resources as inferred so as to conform to the definitions set out in the proposed National Instrument 43-101 (T.N.M., Dec. 7/99).
The bulk of the resources are held in the Tiriuniak zone, where 13.7 million tonnes grading 9.7 grams gold have been outlined. The remainder consists of the following:
- 3.3 million tonnes grading 7 grams in the F zone;
- 3.9 million tonnes grading 5.8 grams in the main Wolf zone, plus another 800,000 tonnes grading 11.5 grams in the north Wolf zone; and
- 1.9 million tonnes grading 7.1 grams in the Pump zone.
Mineralization at each deposit remains open at depth.
Gold mineralization is hosted in Archean-aged, structurally deformed iron formation and mafic volcanics. Within the iron formation, mineralization is dominantly controlled by large fold closures.
Metallurgical tests indicate that gold recoveries in the range of 91-96% are possible using a combination of gravity concentration and cyanide-leach techniques. Between 25% and 45% has been recovered using gravity concentration alone.
WMC continues to evaluate the project’s economic merits. An independent prefeasibility study completed last summer concluded the project can support annual production of 400,000 oz. gold over 10 years, provided resources containing at least 4.8 million oz. can be blocked out.
Such an operation would employ both underground and open-pit mining, and the projected dailing milling rate is 3,750 tonnes at a life-of-mine average grade of 10.4 grams. The average operating cost is pegged at US$35.74 per tonne, or US$114 per oz.
No capital expenditures have been released, though some analysts have estimated that between US$275 and $350 million would be needed.
WMC is shipping supplies to the site in preparation for the new drilling season. Both definition and exploration holes will be sunk in the Wesmeg area, as exploration continues elsewhere on the property.
WMC International, which is a division of Australian-based Western Mining Corp., has so far spent more than $34 million on the project.
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