Probe Mines releases updated resource
Recent results from some 180 holes at Probe Mines’ Borden Lake Project confirm a promising low-grade, bulk tonnage gold deposit with a high-grade core in a region of Ontario that geologists have long dismissed as having little if any mineral potential.
Initial drill results of 305,000 ounces in the indicated category and 3,755,000 ounces inferred from the property near Chapleau, 200 kilometres west of Timmins, have ballooned to just over 4 million ounces indicated and close to 2 million ounces inferred.
“The project has come very far in a very short period of time,” said David Palmer, Probe Mines’ president and CEO. “It’s 14 or 15 months since we started our Phase 2 drilling program and we already have an updated resource.
The new resource estimate, announced April 2, upgraded the entire initial resource, added more inferred ounces, and also improved the quality of the resource.
At a cut-off of 1 g/t, the higher-grade core has an estimated 1.5 million indicated ounces averaging 1.46 g/t and another 407,000 inferred ounces averaging 1.3 g/t.
“The upgraded resource was an important milestone for us because it started to really define the higher-grade core,” said Palmer. “The higher-grade core differentiates Borden Lake from other deposits because it accounts for more than 50 per cent of the resource. That’s going to have a huge effect on the economics of the project. Higher grade is less sensitive to the gold price, and results in a faster payback on the project.
“The criticism of low-grade, bulk tonnage deposits is that the capexes are very high. Some of the big projects out there are $1 billion. With our higher-grade core, we could actually start with a much smaller operation and still produce a significant amount of ounces.”
Another important attribute of the Borden Lake Project is its proximity to existing infrastructure. The deposit is a mere nine kilometres from the town of Chapleau, and only one kilometre from the highway.
“It’s the easiest access I’ve ever had to a property,” said Palmer.
Borden Lake was an outcrop discovery made by prospectors Mike Tremblay and Jack Robert. It was pitched to other junior mining companies, but they all walked away thinking it wasn’t that interesting.
“When it was brought to our attention, we thought we could go in there to test the potential and if there was nothing there, we could walk away without having spent too much money,” recalled Palmer.
Probe Mines was planning to start with geophysics after acquiring the property in March 2010, but a diamond drill made it to the site before the line cutters and geophysics crew.
Of the eight short holes drilled from the site of the outcrop, six were in the zone, “and they were all top to bottom gold,” said Palmer. “It was the most surprising results I’ve ever had on a program.
“We put all of our attention on drilling to see if this thing would continue because one of the worries you have with a hole that looks really good is that it could pinch out very quickly as you begin drilling away from it, so we spent the first year drilling and never stopped.”
Probe has drilled some 60,000 metres in 190 holes and currently has four diamond drills turning on the property. Drilling to a depth of between 400 and 450 metres indicates that the deposit is open at depth and along strike.
There is also potential for additional discoveries on Probe’s 80-square kilometre land package, which includes 17 kilometres of strike length along the Borden Lake belt, said Palmer.
The next step is a preliminary economic assessment, which Probe expects to complete by year end.
Junior miners have seen better times for raising money, but Palmer isn’t worried.
“We’re in a fairly good position because we have a substantial treasury of $32 to $33 million, so we can maintain our pace through the next two to two and a half years without having to go back to the market.”