Exploration drilling over the summer at Seabridge Gold’s (SEA-T, SA-N) Courageous Lake project in Canada’s Northwest Territories uncovered a new gold occurrence about 10 km south of the 6.5 million ounces of proven and probable gold reserves the company has developed at its FAT deposit, 240 km northeast of Yellowknife.
The company hopes that the Walsh Lake discovery will prove to be a sizeable deposit that can extend the mine life of its 100%-owned FAT deposit. In July, a prefeasibility study envisioned FAT would have a 15-year mine life as a 17,500-tonne-per day single-pit operation. The PFS forecast average annual production of 385,000 ounces of gold, at an average cost of US$780 per oz., and pegged capital costs to bring the mine into production of US$1.52 billion, including a US$187 million contingency.
Seabridge believes that if it can find high-grade material near FAT that could be recovered early on in the mine’s life, it would improve capital efficiency and offset the higher capital costs of FAT’s remote location by amortizing them over a longer project life. To that end, it is spending about $8.5 million on exploration this year.
The company believes that the 52-km-long Matthews Lake greenstone belt, which is home to the 2-km FAT deposit and two past-producing underground mines, is full of potential.
The Walsh Lake discovery, made public in September, appears to be the southern extension of the historical Tundra gold mine, a high-grade gold mine that was closed down in 1999 due to low gold prices, the company said. (The target area stretches about 1.5 km south of the former mine.)
Highlights from eight drill holes released in mid-October include 1.1 metres of 15.47 grams gold per tonne and 3.7 metres of 4.26 grams gold in hole CL-228; 1.6 metres of 9.20 grams gold in hole CL-229; 9.2 metres of 9.50 grams gold in hole CL-230; and 23.3 metres of 3.62 grams gold in hole CL-233. Hole CL-234 returned 1 metre of 58.85 grams gold.
In September, the company released the first batch of assays from its drilling at Walsh Lake, which started about 1.4 km south of the Tundra mine and moved northward at 200-metre spacing. The drill program targeted a stratigraphic contact traced by geophysical surveys. Grades improved as the drilling moved north towards the former Tundra mine.
A hole drilled furthest north returned intercepts of 21.2 metres averaging 8.16 grams gold, 5.6 metres grading 5.93 grams gold and a further 4.9 metres of 10.49 grams gold. The 21.2 metre intercept included two intercepts within it averaging above one ounce of gold per tonne, which was the grade reportedly exploited in the Tundra mine, Seabridge said.
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