Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Omai Gold Mines (TSXV: OMG) has provided an updated mineral resource estimate for its flagship property in Guyana, incorporating an expansion to the Wenot deposit and the previously disclosed Gilt Creek deposit.
Together, the two deposits have mineral resources totalling 28.7 million tonnes grading 2.15 g/t gold containing 2.0 million oz. in the indicated category and 31.3 million tonnes grading 2.26 g/t for 2.3 million contained oz. in the inferred category.
Compared to the last resource estimate in October 2022, the indicated ounces represent a 4% increase, while the inferred ounces grew by 28%.
Notably, the Wenot indicated resource increased by 10% to 834,000 oz. while its inferred resource grew 45% to 1.6 million oz., owing to increased gold grades in both categories. Following the 2023 drilling, about 39% of the Wenot resource is now west of the historical pit, an area considered well suited to initial mining, Omai said.
Meanwhile the Gilt Creek deposit has 1.2 million oz. of gold in the indicated category and 665,000 oz. of gold inferred. The deposit is located 500 metres north of the Wenot deposit and below the past-producing Fennel pit.
“We are pleased to deliver another substantial increase to the mineral resource estimate for our Omai gold project in Guyana. Also very importantly, there has been a notable increase in the gold grades,” Elaine Ellingham, CEO of Omai Gold Mines, stated in a news release.
She also noted that with this expansion, the contained ounces have now exceeded the total gold produced from the former mine, and at similar grades. It is estimated that approximately 3.8 million oz. at an average gold grade of 1.5 g/t were mined between 1993 and 2005, when the gold price was less than $400/oz.
“When in production, Omai was the largest primary gold producer in South America, averaging over 300,000 ounces of gold annually,” Ellingham highlighted.
The 2024 mineral resource, according to the Canadian gold junior, will form the basis of the project’s preliminary economic assessment, which is currently underway and expected to be announced in the first quarter.
Certain baseline studies have also been completed, and the company said it will continue steps towards an application for an environmental permit and a mining licence once the PEA and additional requisite work is completed.
Shares in Omai Gold Mines gained 7.1% to C$0.075 late in Thursday afternoon following the resource update. The stock traded between C$0.035 and C$0.08 over the past 52 weeks. The company’s market capitalization is C$28.3 million.
