Renforth Resources Increases Asset Value With Second Resource Upgrade in Just One Week
The level of activity for Renforth Resources Inc. (CA:RFR – $0.04 & US:RFHRF – $0.02 & GER:9RR – €0.02) has been on a torrid pace. Progress to continue systematic exploration, and the discovery success achieved along the way, has resulted in a steady flow of positive news. However Renforth has now surpassed even its own high standards. After reporting a compliant resource report for its Parbec property just last week, the Company followed up with a resource estimate for its New Alger property this week.
The Cadillac Break structure extends laterally through New Alger for roughly 1.4 kilometers. Previous operators of the property were targeting higher grade gold alteration, which was mostly confined within narrow vein intervals. Contrary, Renforth has taken the approach to outline bulk tonnage alteration in rock units surrounding the main structure. While this often includes lower grade gold resources, the total gold clout of these zones is now amounting to a significant deposit.
Similar to the report issued for Parbec, a three-dimensional model was created for New Alger as part of the process. This served as a starting point to enable a conceptual open-pit shell to be created for the near surface resource zones. Resources closest to surface represent the lowest cost zones of the deposit for possible extraction and are therefore more attractive economically.
Renforth presented this maiden open-pit resource amounting to 61,500 oz Indicated, along with 123,300 ounces of gold Inferred. Additional resources were defined below the pit zone including another 64,700 ounces of gold in the Inferred category.
Of note, only the historic geological data extending back to 2007 was assembled to establish the resource, along with the first hole of the four drill holes completed by Renforth earlier this year. Consider that Renforth successfully encountered gold bearing zones in all four of the drill holes.
Significant Future Upside as Exploration Work Continues
Presentation of this resource report is just a starting point. The well-defined system of at least three main quartz veins remains open in all directions. Therefore it is reasonable to assume that the initial gold resource estimate for New Alger is set to expand as work continues and additional data becomes available to update the report.
Gold zones within 215 meters from surface were included in the pit shell resource. Consider that the deepest drill intercepts so far from the project have been outlined down to 416m below surface. One may assume a lot more gold is awaiting confirmation as deeper exploration work continues.
New drill targets will be determined based on sections of the property where gold alteration is believed to extend but current drill density is insufficient to include within the resource model. This interactive process is just one of the technologies embraced by the Company to improve the efficiency of the exploration effort.
Additional high grade veins and offshoots may also be encountered within the main structural corridor. As more drill holes are completed from different angles, the gold resources of this project are expected to increase.
Metallurgical Testing Commences
With a follow up news item this week, Renforth has confirmed that metallurgical testing is now underway. SGS Lakefield, a highly respected laboratory, was selected to complete preliminary metallurgical analysis. The Company has submitted approximately 30kg (~66lbs) sample material collected from the Discovery Veins zone at New Alger.
Sample material will be evaluated using standard processing options for the recovery of gold and silver. The testing regimen will include Head analysis, Mineralogy, primary gravity separation and subsequent cyanide heap leaching of the remnant tailings. The testing is based on material trenching sample rejects that were extracted in fieldwork programs.
This represents an exciting advancement for Renforth. Beyond the first objective of proving up a new deposit, the Company is now working to establish specific performance criteria that will enable further study on potential development options. If satisfactory results are achieved during this testing, then it becomes a positive factor in the decision process to move forward with mining, start generating cash flow, and stop being reliant on private placement funding.
Promising Characteristics for Economic Extraction
The majority of the gold resource defined so far is within the Inferred category. Geological modeling is weighted towards closely spaced drill holes for reliable data. Drilling work focused on ‘gap zones’ between gold intervals may further expand on the deposit area. This in turn will enable the geological consultants to calculate an upgraded resource estimate with a higher degree of confidence in the future. The prospect of a larger overall resource, with a higher degree of confidence, increases the potential shareholder value proposition.
As it stands, the Company has been able to present a very attractive deposit at New Alger. The resources are outlined within the primary corridor of the Cadillac Break. Extensive alteration zones near surface have been identified in the surrounding rock units. These disseminated gold zones are now building towards a much larger overall deposit. The conceptual pit shell therefore represents a custom mining scenario that may deliver appealing economics.
For a development option, Renforth may not have to invest in the expense to build a processing plant. The New Alger area is a prolific mining district with superb access to infrastructure and support services. Mining is a way of life for this region. A number of established gold mines are currently operating in close proximity to the project. As these gold mines approach the end of their resources, they may look to New Alger for a source of compatible, low cost feed to continue processing and recovery operations. Alternately, Renforth may leverage this opportunity itself, arrange contract milling, and commence mining operations.
Congratulations are in order for Renforth to deliver two NI43-101 compliant resource estimates within the same month, for active exploration projects in Quebec. Each of these projects are considered Brownfield properties, where historic gold mining was once in operation. The previously active mines serve as a testament to the gold endowment in the area. More importantly, they provide a head start for recent activity to successfully outline new discovery zones.
Each of these emerging deposits is economically attractive, with gold grades that are considered robust for open-pit mining assumptions. The near surface zones are already significant in terms of the ounces of gold established so far. However, the total gold resources will very likely amount to much larger deposit areas as further exploration work continues.
Renforth is validating the exceptional discovery potential of its suite of exploration properties. The Company has efficiently outlined these new gold zones in a relatively short time frame. The publication of the resource reports for Parbec and New Alger demonstrates the proficiency of the project geologists to achieve success at the end of the drill bit.
Moreover, the asset value consideration for Renforth shareholders has also rapidly advanced. With defined gold deposits in hand that present attractive economic characteristics, these properties are now moving up the value curve with greater potential for development, and higher intrinsic value for a possible third party transaction to emerge.
The Company is gaining recognition for these accomplishments. Very few junior explorers have achieved the stature to present compliant resource reports for two separate projects. To do so within the span of a week is unprecedented. With its reputation as one of the most active explorers in Canada, Renforth has surpassed even its own high standards. Smallcaps Recommendation: BUY.
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