Maritime expands Hammerdown gold as output nears

[Redator]

Canadian explorer Maritime Resources (TSXV: MAE) said drilling at its Hammerdown project in Newfoundland and Labrador identified a new near-surface gold zone with “substantial” grades. The stock jumped.

Hole HDGC-25-272 cut 13.9 metres grading 24.5 grams gold per tonne from 11 metres depth, including 8 metres at 42.2 grams from 17 metres, Maritime said Wednesday in a statement. Another hole, HDGC-25-276, cut 13.5 metres at 7.2 grams from 22.5 metres downhole.

Located in the Baie Verte mining district, about 500 km west of the provincial capital St. John’s, the brownfield Hammerdown is due to start producing this year.

With major permitting now complete, the company is focusing on site development and mine pre-stripping work this summer. The Pine Cove mill, which recently restarted operations using stockpiled feed, is being optimized now to accommodate ore from Hammerdown.

The site operated first as an open-pit mine, then an underground operation, from 2000 to 2004, producing about 143,000 oz. gold. Maritime plans to mine Hammerdown as a high-grade open pit.

Significant widths

The new zone, which sits south of the historical underground mine workings, starts at surface and lies within the planned open-pit footprint, Maritime said. Results so far demonstrate high-grade gold mineralization across significant widths that remains open at depth, CEO Garett Macdonald said.

“This presents an attractive opportunity for early development and cash flow by now having all permitting completed for the Hammerdown gold project and our Pine Cove mill now fully operational,” Macdonald said. “It also highlights the potential for additional mineral resources in the immediate area of the deposit.”

The new zone builds on shallow a deposit outlined in January from drill results. Unlike the rest of the deposit, where the resource extends from east to west, mineralization in the new zone follows a north-south axis.

Other highlights include hole HDGC-25-273, which cut 36 metres grading 1.7 grams gold from 25.7 metres depth, including 15.4 metres at 1.9 grams gold from 39.1 metres downhole. Hole HDGC-25-271, meanwhile, intersected 24 metres at 1.7 grams gold from 7 metres depth.

Capital costs

A 2022 feasibility study for Hammerdown outlined a mine life of five years producing an average of 50,000 oz. gold a year. Initial capital costs were estimated at $75 million, with a 1.7-year payback period at a gold price of $1,750 per ounce.

Using a 5% discount rate, the feasibility study forecast an after-tax net present value of $102.8 million and an internal rate of return of 48%. All-in sustaining costs were pegged at $912 per ounce.

Shares of Maritime jumped 4.6% to a three-year high of C$1.36 in Toronto Thursday. That gave the company a market capitalization of about C$153 million ($111 million).