These results confirm the continuity of mineralization, the company said. In all, Omai Gold released results from 8,460 metres of diamond drilling to date for 17 holes. The project centres on the Wenot deposit and satellite targets at East Wenot and West Wenot, and Snake Pond. The nearby Gilt Creek deposit to the northeast offers future underground potential.
Drilling targeted both deeper sections and gaps in the open pit mining scenario tabled in an April PEA. The results indicate potential to expand the resource and improve project returns, CEO Elaine Ellingham said in a news release.
Omai plans to update the resource update by March, with the PEA to follow by June.
At the West Wenot area, hole 24ODD-086 returned 2.96 grams of gold over 19.4 metres from a depth of 293.2 metres. It extended known mineralization 100 metres below prior high-grade zones.
Shares gained as much as 8% to C19.5¢ in early trading Thursday, before falling back to Wednesday’s closing price of C18¢. Coming off a 12-month low at 3.5¢, shares are trading near the period high of C20.5¢. It has a market capitalization of C$97 million.
Economic update
Work is also underway at the Gilt Creek deposit. The PEA excluded Gilt Creek at the start to facilitate early development. Management now sees integrating it as key to extending the site’s life beyond 20 years.
Gilt Creek has an indicated resource of 11.1 million tonnes at 3.2 grams gold per tonne for 1.2 million oz. of the precious metal. It has another 32.4 million tonnes of inferred material at 2.26 grams gold per tonne for 665,000 oz. that holds potential to further boost long-term output given more drilling.
The drilling campaign aims to convert untested areas into mineralized material.
The April PEA estimated Wenot’s after-tax net present value at $556 million (5% discount) and projected annual gold production of 142,000 oz. over 13 years.
Omai forecasts annual after-tax free cash flow of $112 million, translating to about $1 billion in cash flow across the mine’s lifespan. All-in sustaining costs were projected at $1,009 per ounce. According to the PEA, the mine’s construction cost of $375 million can be recouped in less than four years.