Woulfe starts outlining Muguk’s charm

Woulfe Mining, (wof-v) pleased with an initial resource at the Muguk gold-silver project in South Korea, has started a scoping study at the past-producing mine.

Muguk is a “very exciting” project with a resource grading above 10 grams gold per tonne, Woulfe’s CEO and president, Brian Wesson, said in a Jan.10 press release.

The deposit now hosts a National Instrument 43-101 inferred resource of 520,000 tonnes of 11 grams gold, using a cut-off of 3 grams gold. AMC Consultants based the estimate on a 3-D geological model of the main Three Brothers vein and historic data. The average vein width was 1.2 metres.

Woulfe says a silver grade for the resource wasn’t computed due to a lack of sample data.  

Nevertheless, intrigued by the initial gold count the company noted in the same press release, it gave AMC a go-ahead for a scoping study.

AMC will examine if the Three Brothers vein could support a 150,000-tonne-per-year operation to produce 34,000 oz. gold a year assuming a grade of 7.5 grams gold, and a gold recovery of 93%. The study should be completed shortly.

Muguk, Korea’s largest past-producing gold mine, operated in 1934-72 and 1987-97, before closing due to commodity prices crashing.

According to reports, during its first operating stint Muguk produced 8.15 tonnes of gold. When it reopened in 1987, miners produced from the No.2 vein at a throughput of 200 tonnes a day.

In 1994, Korea Resources outlined a NI-43-101 non-compliant resource at Muguk of 1.4 million tonnes grading 13.5 grams gold and 72.8 grams silver for 615,956 oz. gold and 3.3 million oz. silver, using a 10-gram gold cut-off.

After the resource was completed, the deposit was mined for another three years.

Woulfe is currently working to delineate a compliant resource.  

In April 2010, it poked its first two holes in the deposit, targeting the secondary No.7 vein. The first hole returned 2 metres of 5.6 grams gold and 26 grams silver, at 414 metres depth. The second hole intersected less than half a metre of 16.6 grams gold and 16 grams silver, at 386 metres depth.

Last July, the junior punched another hole to test the Three Brothers vein at depth, which had a known depth of 600 metres.  

The hole returned 3.6 metres averaging 1.2 grams gold and 114 grams silver, starting from 691.3 metres depth.

Mineralization at the deposit occurs within several parallel, steeply dipping quartz veins. Muguk is known to have more than 20 separate vein systems, with at least six being traced over 1.3 to 2.2 km strike lengths.

 Most of the mineralized veins run discontinuously for 400 to 2,000 metres along strike and to a known depth of 800 metres. The veins average less than a metre in width, but can swell up to 2 metres in some areas.

While the No. 2 and the Three Brothers veins are the main structures, Muguk has several secondary veins which could provide “potential upside,” says Wesson.

He adds the company’s flagship Sangdong tungsten-molybdenum project, also in South Korea, is on track for development.

Feasibility work is underway at the past-producing mine, with construction expected to start soon. Woulfe is targeting commercial production at Sangdong by early next year.

On the resource news, the junior moved up 2.6% to close at 19.5¢.