VANCOUVER — Redhawk Resources (RDK-V) has seen a more than 175% increase in the total resource at its Copper Creek copper-molybdenum-silver project in Arizona with a new estimate.
The update comes four years after the previous 2008 estimate, in which time the company has added some 36,400 metres of drilling in 32 holes to the roughly 14,700 metres in 42 holes it had drilled for the previous resource. The company also made use of 140,600 metres of drilling in 401 holes completed by other operators before Redhawk took control of the property.
Using US$3 per lb. copper and a 0.2% copper equivalent cutoff, Copper Creek’s measured and indicated resources now stand at 455.6 million tonnes grading 0.44% copper, 0.009% moly, and 1.37 grams silver per tonne for contained metal totals of 4.45 billion lbs. copper, 86.8 million lbs. moly and 20 million oz. silver. Inferred resources add 436.6 million tonnes grading 0.34% copper, 0.007% moly and 0.9 gram silver for a further 3.3 billion lbs. copper, 63.2 million lbs. moly and 12.6 million oz. silver.
The deposit consists of an upper portion of several near-surface breccia-hosted deposits and areas of mineralization in steeply dipping structural zones, and transitions to deeper porphyry deposits with consistent mineralization and strong moderate to low angled veining.
The company noted that there were a number of blocks of mineralization with the grades and size to be potentially bulk minable, but were excluded from the resource because they did not fall into the existing open pit geometry. Redhawk also noted that the resource is still open in all directions, and that only a small portion of the prospective ground containing hydrothermal breccia bodies has been tested so far.
With the new resource in hand Redhawk is launching into a prefeasibility study while continuing to work to expand the resource. A 2010 scoping study, based on a 10,000-short-ton-per-day mine and US$2.75 per lb. copper, showed a pre-tax net present value of US$350 million using a 7.5% discount rate, and an internal rate of return of 20.4%. The study estimated total mine and mill capital costs of US$389 million.
Redhawk’s share price closed up a penny at 50¢ on the news. The company has a 52-week share price range between 31¢ and 79¢ with 142.3 million shares outstanding.
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