Red Mountain Mining Strikes Gold at South West Breccia
High-grade gold produced from the South West Breccia (SWB) resource drilling is predicted to firm up Red Mountain Mining's (ASX: RMX) shares. The SWB is a component of the Lobo Project carried out by Red Mountain as part of the larger Batangas Gold Project based in the Philippines.
The SWB drilling resource statistics are as follows: Metallurgical hole intersects: 6.7 metres at 11.6 g/t gold; and 18 metres at 6.85 g/t gold, including 6 metres at 11.5g/t gold. Drilling below current pit design intersects: 6 metres at 7.16g/t gold, including 3 metres at 11.5g/t gold. (All intersections are downhole widths). As these were just the results from preliminary drilling, ASX: RMX investors are understandably eager for what will be produced from deeper drillholes.
The SWB shoot hosts an Indicated and Inferred 194,000 tonnes at 7.2g/t gold for 45,000 ounces of gold. This includes an Indicated Resource of 178,000 tonnes at 7.4g/t gold for 42,000 ounces and an Inferred Resource of 16,000 tonnes at 5.3g/t gold for 3,000 ounces.
“These drilling results are encouraging because they indicate continuity of the high grade resource below the current pit design. Further drilling, in progress, may lead to the location of deeper extensions of this high grade zone,” says Managing Director Jon Dugdale.
Exploration success here will have an even greater effect on the increasing momentum behind the resource upgrade case at SWB, providing an enhancement to the initial Scoping Study economics. One of Red Mountain’s most recent scoping studies produced a low pre-production capital cost estimate of approximately $16.7 million. This was paired with a fetching 70 percent IRR. The longevity of the mine revenue is forecasted to produce A$134 million for Batangas. This revenue is estimated over the initial 4.5-year mine life on production of 90,000 ounces of gold. Net cash flow is estimated at $40 million. Payback is anticipated in 1.2 years. Average C3 are A$1050 per ounce while C1 cash costs are about A$769 per ounce.
