When sitting on a bountiful resource, a jewel in the crown so to speak, a wise company seeks to make the most of that asset as quickly and efficiently as possible. Over the first half of this year, Sacre-Coeur Minerals (TSX-V:SCM) has been attempting to do just that, with their Million Mountain Property in Guyana. Following on from some strong preliminary resource estimates, Sacre-Coeur upgraded its mining methods at the site, gearing up for full scale production and sales from the project over the next few months. At the same time, the company has continued to expand its exploration of the property with the intention of expanding the resources at Zone 1 of the project.
Sacre-Coeur Minerals is a Canadian based company, which seeks to acquire, explore and develop mineral properties in areas of South America deemed to have relatively high potential for mining success, while having relatively low political risk. Specifically, it is engaged in the exploration and development of properties for the potential mining of gold, metals and diamonds in South America, initially focusing on exploration for gold on its properties in Guyana. The company sees itself has having a longer term view of these business activities, which it intends to engage in on a long term basis.
As previously noted, the company’s flagship property, Million Mountain, is located in the central north region of the South American country, Guyana. In September 2008 Sacre-Coeur reported an NI 43-101 compliant resource estimate for Million Mountain, with 12.1 million tonnes of measured resource, grading 1 gram per tonne (g/t) of gold, and indicated resources of 2.2 million tonnes grading 0.9g/t of gold. This suggests a total contained gold estimate of 451,397 ounces, 388,456 ounces form the measured category and 62,941 ounces in the indicated.
After receiving encouraging results from an initial test mining program in February this year, Sacre-Coeur stated their intention to modify its mining system at the site, gearing up for the start of full scale production at the Million Mountain property. The test program focused on examining the distribution and character of the gold, in order to optimize for production scale operations and to develop the most effective concentrate refining techniques and parameters. Based on the results, it was determined that mining of the alluvial deposit zone would be more effective using water jets (known as hydraulic mining), which allow for thorough and precise cleaning of the high grade coarse gold typically found at the bedrock interface. The nature of this method also reduces the role of heavy machinery in the operation, and with it the need for skilled heavy equipment operators. This brings about a reduction in costs both from the machinery, and the labour.
In May, prospects at the site received a further boost after Sacre-Coeur reported they had intersected over 100 meters of mineralization at Zone 1 of the Million Mountain project. Specifically, the company reported that drill hole MM17510 intersected 103.6 meters of mineralization, grading 1.26g/t of gold. This included a 15 meter section at the higher grade of 4.81g/t of gold. All told, the drill hole encountered seven significant zones of gold mineralization over its 589 meter length, at an average grade of 0.4g/t of gold. At the time, the company stated that “Significantly, bedrock exposed on the floor of the test mining pit in Alluvial Area 2 which is consistent in rock type and character to that of the existing Zone 1 resource host has provided further encouragement for extension of the Zone 1 resource for an additional 0.5km further to the Northeast. This newly exposed bedrock is being mapped and evaluated for further step out drilling on a probable extension of Million Mountain Zone 1 in addition to the already planned ongoing resource expansion drilling”.
The outlook improved further still, just last month, when Sacre-Coeur announced additional positive intercepts that would add to the resource estimate for Zone 1 at the next update. These drill results included an intersection of 68.65 metres grading 0.94g/t of gold, including the higher grade intersects: one meter grading 9.18g/t, one meter grading 6.3g/t, and one meter grading 7.26g/t. Five other narrow zones grading over 2.0g/t gold were also encountered, including intersections of 0.47 meters at 13.44g/t, 0.53 meters at 8.62g/t gold, one meter at 3.25g/t, one meter at 2.32g/t and 23.6 meters at 0.53g/t.
June also saw the completion of the planned conversion to the new hydraulic mining methods at Zone 1. Cost of the conversion fell well below the estimated maximum of C$200 thousand, and with capacity now at target rates, the company expects gold production to be maximized through fine tuning of the processing plant over the course of the next two to three months. Sacre-Coeur said they hope the benefits of this, could potentially make the company completely cash self sufficient. The company said that initial observations confirm the revised mining methods are resulting in greatly improved extraction of the alluvial material at the bedrock interface, as the initial test program has suggested. Looking back at the achievements in June, Sacre-Coeur said in a statement “achievement of this milestone, together with the recently announced positive results of the Company’s step-out drilling program on its Million Mountain Zone 1 resource body sustain our enthusiasm for the Company’s growth potential”.
Looking at the flow of positive news at the site over recent months, one can not help coming away with the feeling that they are correct, and signs are pointing towards a lot of growth potential for the company. If these strong results continue to come to pass, and the move to production at the site results in strong, steady, cash flow for Sacre-Coeur, it seems the jewel in the crown may just pay off.