Junior explorer, Superior Resources has boosted its Steam Engine gold resource to 196,000 ounces representing an increase of over 60 per cent in total measured, indicated and inferred resources from previous calculations incorporating a lower grade owner-operated processing model.
The latest resource estimate incorporates an additional 85 reverse circulation drill holes completed during the company’s 2021 drilling blitz at its Greenvale project in northern Queensland aimed at infilling and extending the known resource.
Under the refurbished mineral resource estimate, the company says it considered two likely processing models resulting in two different mineral resource estimates.
The first scenario involves toll treating ore offsite. Preliminary studies undertaken by the company indicate that lode intersections of 1.0 gram per tonne gold and above would likely be viable for a toll treatment operation. Under the proposed model the revised total measured, indicated and inferred resource comes in at 2.72 million tonnes grading 2.0g/t gold for 171,000 ounces of contained gold, up 40 per cent from previous calculations.
If Superior were to develop a stand-alone operation, the company says mining lode intersections of 0.3 g/t gold or more would be feasible. Using a lower cut-off grade of 0.25g/t gold the total measured, indicated and inferred resource chimes in at 4.18 million tonnes grading 1.5g/t gold for 196,000 ounces of the precious yellow metal.
Superior’s Managing Director, Peter Hwang said: “This latest upgrade is a significant outcome, considering that the 2021 drilling comprised predominantly infill holes. The Resource has more than doubled since we started resource definition drilling in mid-2020, when it stood at 94,000 ounces. The robust and continual growth of the Resource has prompted us to undertake high-level conceptual mining studies as part of a pre-feasibility and strategy development process.”
At Steam Engine a promising scoping study contemplated a small-scale gold operation using regional milling capacity to process up to 79,000 ounces of gold over 21 months.
The early-stage study highlighted robust financials with a base gold price of $2,200 per ounce generating overall post-tax cash flows of $24.2m, a net present value of $21.2m, with an internal rate of return clocking in at an impressive 242 per cent.
The study forecast a modest start-up capital expenditure of between just $5m and $10m for the proposed operation, with a payback period of just 11 months.
Management says the latest mineral resource estimate will feed into a pre-feasibility open-pit mining study that will include pit optimisation, metallurgical test work and the financial modelling of multiple mining and processing scenarios.
In tandem with the prefeasibility study, further resource extensional drilling is slated to commence in early May designed to extend the resource envelope which has been defined along a1.3km strike length to depths of only 100 metres.
Additionally, the company says recent exploration efforts have identified several promising mineralised corridors totalling over 14kms in length that show significant scope for extending known gold lodes along with discovering new lodes. The company is putting the finishing touches to a regional exploration drilling program due to commence when regulatory approvals have been granted.
With the gold price rallying in recent months on the back of escalating global tensions, Superior looks poised to make hay while the sun shines at its Steam Engine gold project.
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