Adelaide Resources Ltd (ASX:ADN) could be sitting on a proverbial gold mine at the Barns gold deposit in the Eyre Peninsula gold project, South Australia, based on promising results from an updated scoping study.
At an A$1,500 per ounce gold price and based on operating cost, capital and recovery assumptions, the study indicates positive economic potential.
It also identifiee the improvements necessary to generate robust economics.
The company undertook an in-house revision of the 3-D mineralisation model for Barns revealing two flat lying supergene gold zones overlying stacked sub-parallel primary lodes.
Independent experts have completed 3-D block modelling and estimated a non-JORC mineral inventory which supports the potential for gold mining operations.
Significantly, a first pass pit optimisation run assuming A$1,500 per ounce gold price and reasonable capital and operating costs, indicated a positive economic potential for the project.
While this scoping study is at a very high level, the results provide confidence for Adelaide Resources to advance the project.
In October 2015, Adelaide Resources had announced a combined exploration target for the Barns, White Tank and Baggy Green prospects between 2.5 and 3.5 million tonnes grading 1.3g/t to 2.0g/t gold.
The company aims to establish a gold resource for the Eyre Peninsula gold project comparable to other South Australian deposits, including Havilah Resources Ltd’s (ASX:HAV) operating Portia Gold Mine.
Adding interest, Adelaide Resources is exploring the Eyre Peninsula for lithium as well, where the company holds granted exploration tenures over two salt lakes prospective for lithium.
The share price of Adelaide Resources has surged by about 90% during the last three months.
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