Inferred resources now total 16.2 million tonnes at 1.6 grams gold for 843,000 oz. of gold, a 500% increase over the previous estimate.
“This significant increase validates the approximately 65,000 metres of strategic exploration drilling completed over the past several years,” Michael Michaud, Red Pine president and CEO, said in a release. “The updated (resource) not only shows a material increase in the size of the deposit, but it also significantly increases our confidence in the data and the quality of the deposit and reinforces our vision for a potential high-quality open pit and sizeable higher-grade underground mine.”
Red Pine shares gained 44% to C$0.13 apiece on Wednesday morning, valuing the company at C$24.7 million. Its shares traded in a 52-week range of C$0.07 to C$0.25.
Doctored grades
The update comes almost four months after Red Pine faced a scandal when assay results were allegedly doctored to marginally increase grades. The company alleged former CEO Quentin Yarie changed 532 assays out of 98,000 by being the sole recipient of emailed results from Activation Labs. Yarie was CEO from July 2015 until Feb. 21 this year when he stepped down for unrelated reasons.
Red Pine shares lost 60% of their value on May 1 when the assay discrepancies were revealed. Michaud said at the time they were more like embellishments and the 10% to 15% they accounted for was easily recoverable. However, its shares have yet to return to the level of the first third of the year.
Jubilee dwarfs Surluga
The project consists of the Surluga, Jubilee open-pit and Minto underground deposits on the site near Lake Superior, 2 km southeast of the town of Wawa and about 500 km northwest of Sudbury. Most of the tonnage in the update is in the Jubilee open-pit deposit, with a smaller part in the Jubilee and Minto underground deposits.
While the update didn’t include Wawa’s Surluga deposit, the indicated and inferred tonnage in Jubilee is more than 10 times larger than Surluga’s portion in the 2019 estimate.
Following the discovery of the assay inconsistencies, the company launched an investigation that reduced the Minto deposit’s 2019 estimate by 8,000 to 12,000 indicated oz. (between 30,000 and 40,000 tonnes grading 8.5 to 9.5 grams gold), and 16,000 to 20,000 inferred ounces (75,000 to 85,000 tonnes grading 6.5 to 7.5 grams gold).
It was previously reported to hold 105,000 indicated tonnes grading 7.5 grams gold per tonne and 354,000 inferred tonnes grading 6.6 grams gold.
Jubilee shear promise
Michaud noted that the latest drill results highlight the potential of the Jubilee shear to host significant gold mineralization over thick sections. He said drilling has confirmed mineralization remains open laterally to the north, down dip and down plunge.
Open pit resources are constrained within a pit shell above a 0.4-gram gold cut-off and the underground resources are constrained above 2 grams for Jubilee and 2.4 grams for Minto.
Continuous gold mineralization occurs from surface and goes as far as 1,200 metres down dip, offering the option for open pit and underground development, the company said. The near-term exploration program is to focus on high-grade mineralization, specifically the down dip and down plunge extensions of Jubilee and Minto.
The updated resource also shows potential for expanding the lower-grade mineralization in the hanging wall of the Jubilee shear and in the northern extension of the shear that would occur in an open pit scenario.
The site hosts several historic mines that produced about 120,000 oz. of gold. Red Pine acquired the project in 2014. It released a resource for the Surluga deposit in 2015 and later merged it with one on a historical mine area, Minto, in 2018.
