Bigger resource in Masbate Gold seen

CGA Mining Limited announced on Tuesday that its Masbate Gold Project was seen to contain higher mineral resources than first reported.

The Australian miner leads the Masbate Gold Project through Philippine company Filminera Resources Corp.

In a report, CGA said an updated independent mineral resource and mineral reserve estimates, as of Oct. 31, 2011, showed that contained gold in the total measured and indicated mineral resources increased by 12.7 percent to 5.13 million ounces from 4.55 million ounces reported in the last industry standard report.

Factoring in the ounces already mined since the last resource estimate, this represents an increase of 1.06 million ounces of contained gold or 23.3 percent, the CGA report said.

The company report said drilling continued within and around the current mineralized areas in the gold mine.

There is potential to upgrade mineral classification and further increase the total resources, the report said.

As for the total proven and probable reserves, CGA said it also increased to 3.097 million ounces (including 130,000 ounces of stockpiles) from 3.02 million ounces reported in the last reserve report.

This represents an overall increase of 455,000 ounces or 17.2 percent from the previous estimate after allowing production of 378,000 ounces.

The current profile indicates about 6.5 million tons per annum. The project is currently operating at a 0.7 grams per ton gold cut-off.

“Given the measured and indicated grade in the new resources, we believe the operation will be able to maintain a production profile of about 200,000 ounces per year at its current head grade and without any further increase in throughput,” said the CGA report.

Since the drilling cut-off date (June 2011), further exploration drilling has been completed. Further updates to the reserve and resource estimates are to be completed on an annual basis, with the next drilling cut-off date to be June 30, 2012.

The exploration team remains confident, given CGA’s demonstrated commitment to increase exploration activity, that the ability to further grow the reserve and resource base of the project is strong.

CGA is listed on the main board of the Toronto Stock Exchange and Australian Securities Exchange.