- Gold explorer Resources & Energy (REZ) has significantly upgraded the mineral resource estimate at its Mount Mackenzie gold and silver project, mainly due to the surge in gold prices
- The total indicated and inferred mineral resource for Mackenzie now stands at 129,000 ounces of gold and 862,000 ounces of silver
- The total resource upgrade represents a 29 per cent increase in contained gold, and a 38 per cent increase for silver
- While the revision comes largely off the back of the gold price hike, changes in mining costs and metallurgical recovery assumptions also played a part
- The updated mineral resource estimate will now be used for ongoing mine planning
- It’s been a hard day on the market for gold miners and REZ hasn’t escaped the falls, trading 6.25 per cent lower at 1.5 cents per share by market close
Gold explorer Resources & Energy (REZ) has significantly upgraded the mineral resource estimate at its Mount Mackenzie gold and silver project, mainly due to the surge in gold prices.
New price, new plan
The total indicated and inferred mineral resource for Mackenzie now stands at 129,000 ounces of gold and 862,000 ounces of silver.
While the new estimate comes largely off the back of the jump in gold prices in recent months, changes in mining costs and metallurgical recovery assumptions also play a part.
REZ engaged engineering consultants Mining Dynamics to conduct a pit optimisation study in April this year. The study used a gold price of $2760 per ounce to generate the new plan.
This gold price is a considerable leap from the previous price of $1500 per ounce used in 2015 estimates, and represents a 15 per cent increase to the $2400 which would be used in the prospective mine’s feasibility study.
The inflated price was also used in the resource upgrade. Given there are few certainties the global surge in gold prices will be maintained into the future, the new estimates are probably best taken with a grain of salt.
That said, the total resource upgrade represents a 29 per cent increase in contained gold, and a 38 per cent increase for silver, indicating the other factors were also quite significant in the revised estimate.
Next steps
The updated mineral resource estimate will be used for ongoing mine planning.
Further drilling and metallurgical testwork will also be conducted on the road to detailed feasibility studies for the project.
REZ will also be continuing exploration work at three other licence areas in the Connors-Auburn Arc that appear prospective for gold and base metal mineralisation. The company hopes to eventually develop a portfolio of mining tenements in the area through to production.
It’s been a hard day on the market for gold miners and REZ hasn’t escaped the falls, trading 6.25 per cent lower at 1.5 cents per share by market close.