Shallow infill and step-out drilling 250 metres south of the main deposit at Liberty Gold's (TSX: LGD) flagship Goldstrike project in Utah, suggests that oxide gold bearing feeder structures follow multiple orientations that cross-cut the main deposit trend, the company says.
Exploration results from the Peg Leg area at the past-producing mine also indicate that the zone has starter pit potential given the higher grade results over significant widths.
"Peg Leg had limited historical drilling, a few holes that intersected a bit of gold in the past," Cal Everett, the junior explorer's president and CEO, told The Northern Miner in an email. "Liberty Gold went into the area as follow up targeting the preferred Claron Formation host rocks to most of the Goldstrike deposit and identified a high grade oxide gold system with associated feeder structures."
Highlights of the most recent reverse circulation drilling include 1.17 grams gold per tonne over 67.1 metres from 39.6 metres downhole, including 2.21 grams gold over 25.9 metres, in hole PGS630; 0.44 gram gold over 32 metres from surface and 1.14 grams gold over 42.7 metres from 77.7 metres downhole, including 2 grams gold over 18.3 metres in hole PGS579; 0.99 gram gold over 51.8 metres from 44.2 metres downhole, including 2.45 grams gold over 10.7 metres in PGS631; and 1.63 grams gold over 9.1 metres from surface in hole PGS636.
The project, near the Nevada border in southwestern Utah, hosts disseminated gold mineralization similar to deposits on the Carlin Trend. Between 1988 and 1994, past producers mined 209,000 ounces of gold there from 12 shallow pits at an average grade of 1.2 grams gold.
A resource estimate for Goldstrike that Liberty Gold completed in February outlined 49.6 million indicated tonnes grading 0.54 gram gold for 865,000 oz. contained gold and 16.4 million inferred tonnes grading 0.52 gram gold for 274,000 oz. gold. The resource estimate was based on 1,730 drill holes (historic and Liberty Gold drilling) and used a cut-off grade of 0.25 gram gold.
According to a preliminary economic assessment in early July, which was based on the February resource estimate but used a lower cut-off grade of 0.20 gram gold, Goldstrike would have a mine life of 7.5 years and produce an average of about 95,000 oz. gold annually. Direct operating cash costs were estimated at about US$642 per oz. and all-in sustaining costs US$793 per oz.
The PEA estimated a strip ratio of 1.2:1, pre-production capital of US$113.2 million with a payback in 2.3 years; and an after-tax net present value of US$129.5 million at a 5% discount rate along with an after-tax internal rate of return of 29.4%.
The study did not include any benefits from byproduct silver production or processing any residual gold remaining in the historic heap leach pads, which are being drill-tested.
Earlier this month the company raised $11.6 million in a bought-deal financing that will be used for exploration and development at Goldstrike, as well as Liberty Gold's Black Pine project in Idaho and its Kinsley deposit in Nevada.
Institutional shareholders include Van Eck, Resource Capital Funds, Newmont Mining (TSX: NEM), and Teck Resources (TSX: TECK.B.; NYSE: TECK).