Miner sees more gold in Batangas

Red Mountain Mining Ltd. has increased the high-grade resource of its Lobo prospect in Batangas by 82 percent, or 37,000 ounces of gold, to 82,000 ounces.

The Australian firm said in a statement that it already updated a previous mineral resource issued in January 2013 following results from ongoing drilling and trenching activities in Lobo town.

The Lobo mineral resource estimate, the company said, now stands at a total indicated and inferred volume of 604,000 tons of material, at an average grade of 4.2 grams of gold per ton.

Jon Dugdale, managing director of Red Mountain, said the increase in Lobo’s mineral resources was in line with the company’s strategy of extending the mine life of the planned Batangas gold project.

Along with resources from another prospect called Archangel, Red Mountain’s total resources in Batangas is now pegged at 444,000 ounces of gold.

“The key to the success of this project is the high grade of our initial planned production, and the potential to pay back initial capital very quickly and generate high-margin cashflow from day one,” Dugdale said. “Our exploration teams continue to discover new prospects with the objective of identifying drilling targets for future resource upgrades.”

Last March, the company announced itwould look at building a gold mine in Batangas next year after a scoping study confirmed that a “low-cost, early payback” operation is “strongly viable.”

The projected revenue is pegged at about $121 million, while capital cost was estimated at about $15 million.

According to the scoping study, which pertains to the early stages of a project, the pre-production capital cost may be recovered in just 14 months.

Also, the planned project is expected to provide at least $7.2 million in royalties and taxes for the national and local governments.