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As it works towards a 2023 prefeasibility study for its Val-d’Or East gold project in Quebec, Probe Metals (TSXV: PRB) has announced the last set of results from its 34-hole drill program conducted last year at the Monique gold project on the property.
Highlights from the 29 drill holes completed as part of the expansion drill program about 500 metres southeast of the past-producing Monique open pit mine included: 8.1 metres grading 12.7 grams gold per tonne starting from 238.6 metres depth in drillhole MO-21-242; and 13.7 metres grading 1.9 grams gold starting from 138 metres in drillhole MO-21-237.
The company also said that it completed one-third of its 150,000-metre drill program at the project designed to convert inferred resources at Val-d’Or East into indicated. Results of the 135 holes drilled this year are pending. The company has nine drill rigs at the project, with seven of them located on the Monique project.
“Along with the previous results, we are seeing a shift towards thicker, higher-grade material as we continue to delineate the gold systems at Monique,” said the company’s CEO David Palmer in a press release. “We are advancing quickly with resource expansion, conversion and updating our current gold resource as we move the project towards its pre-feasibility study.”
Located about 25 km east of Val-d’Or, Monique is one of three past-producing mines at the project. It began commercial production in 2013 and ceased in 2015. During that time, a total of 580,000 tonnes of mineralized material was extracted at a grade of 2.53 grams gold per tonne from surface to 100 metres depth for a total of 45,694 oz. gold.
The property, which consists of 21 claims and one mining lease covering 5.5 sq. km., currently hosts a measured and indicated resource of 13.6 million tonnes grading 1.54 grams gold per tonne for 672,800 oz. of gold and an inferred resource of 11.7 million tonnes grading 1.78 grams gold per tonne for 671,400 ounces.
The Val-d’Or East property covers 436 sq. km. and, based on a preliminary economic assessment released last year, is expected to produce an average of over 200,000 oz. gold each year over a 13-year mine life.
At a 5% discount rate, the project would generate a post-tax net present value of C$598 million and an internal rate of return of 32.8%, using a gold price of $1,500 per ounce. The initial capital expenditure is expected to be about C$353 million.
“Probe has generated strong results from Monique to date and the area contains 39% of the measured and indicated resource at Val d’Or East, a proportion that we would expect to grow in the next resource update after substantial Monique drilling,” wrote BMO analyst Andrew Mikitchook, in a research note to clients.
Barry Allan, a mining analyst from Laurentian Bank Securities, described Probe’s latest drill results as positive and said that the program had a high “hit ratio.”
“Given the good success rate of drilling (high hit ratio), we expect the next resource to materially expand (+20%) from the existing 4.1 million ounces at 2 grams per tonne, of which 2.5 million ounces at 1.6 grams per tonne falls into an open-pit configuration,” Allan wrote in a research note to clients.
Out of the total 34 holes, five were designed to test the continuity of mineralization between two conceptual open pits located on the east margin of the known resource, suggesting these areas may be mined as one open pit, Allan added.
