The Batman deposit at the Mt. Todd project in northern Australia has 1.1 million more oz. gold in the measured and indicated categories than originally thought, Vista Gold (VGZ-T, VGZ-X) reports.
An updated National Instrument 43-101 resource calculation on the large, but low-grade deposit — based on a cutoff grade of 0.5 gram gold per tonne — reveals a measured and indicated resource of 89 million tonnes grading 1.01 gram gold per tonne for a total of 2.89 million oz. gold. In addition, an inferred resource of 59 million tonnes grading 0.81 gram gold per tonne contains 1.53 million oz. gold.
The new resource calculation was based on the results of 9,460 assay intervals from 25 holes that Vista drilled last year, as well as the results of more than 91,220 assay intervals from 730 holes previously drilled by BHP Resources, Zapopan and Pegasus Gold Australia, and used in the previous 2006 resource estimate.
The Batman gold prospect, 3.5 km west of Mt. Todd, is part of a gold field that was worked from early in the 20th century. (Gold and tin were discovered in the area as early as 1889.)
The Mt. Todd property contains several gold deposits across a 54- sq.-km area. The two most prominent are Batman and Quigleys, which is 4 km northeast.
Vista Gold purchased Mt. Todd, about 250 km southeast of Darwin in Australia’s Northern Territory, in June 2006.
Pegasus Gold Australia operated the Mt. Todd mine from 1993 to 1997, with Multiplex Resources and General Gold Resources running it from 1999 to 2000 under a joint venture.
But the mine closed in November 1997 and again in 2000 due to a combination of low gold prices (the spot price of gold deteriorated from above US$400 per oz. in early 1996 to below US$300 per oz. during 1997) and higher than expected operating costs (due to several technical problems, including improper crushing and grinding).
In terms of geology, the project is situated in the southeastern portion of the early Proterozoic Pine Creek Geosyncline. Metasediments, granitoids, basic intrusives, acid and intermediate volcanic rocks occur within the geological province.
The Batman deposit consists of a sequence of hornfelsed interbedded greywackes, and shales with minor thin beds of felsic tuff.
Prior to the new resource calculation, a preliminary assessment on Mt. Todd completed last year showed that 266,000 oz. gold and 4.3 million lbs. copper (with a copper credit of US$32 per oz. gold at copper prices of US$2 per lb.) could be produced annually over a 10-year life at a production rate of 30,000 tonnes per day.
Under that scenario, the mine would yield a total of nearly 2.7 million oz. gold and nearly 43 million lbs. copper at an average operating cost of US$391 per oz. gold, net of copper credits.
In Toronto, Vista Gold was trading at about $5.50 on the news and has a 52-week trading range of $3.04-10.36.
On the American Stock Exchange, Vista Gold traded at about US$5.62 a share with a market capitalization of US$185.2 million.
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