Graphite and gold developer Volt Resources (ASX: VRC) has unveiled an updated mineral resource estimate for the Matala and Dunrobin deposits which collectively form the advanced Luiri Hill gold project in south-central Zambia.
The new estimate totals 10.2 million tonnes at 2.6 grams per tonne gold for 851,000 ounces, of which 674,000oz is contained within Matala and 177,000oz in Dunrobin.
It includes a measured resource of 1Mt at 2.7g/t for 86,000oz gold and an indicated resource of 4.3Mt at 2.8g/t for 381,000oz.
An inferred resource has also been quoted as 4.9Mt at 2.4g/t for 385,000oz gold.
The open pit resources at both deposits have been reported above a 0.5g/t gold lower cut-off grade and within preliminary pit shells based on a gold price of US$1,800 per ounce.
Potential underground resources, which are external to the pit shells, have been reported above a 1g/t gold lower cut-off.
Volt managing director Trevor Matthews welcomed the revised figures.
“This is a significant step forward for our gold business strategy and confirms Luiri Hills as a quality gold project with outstanding economic potential,” he said.
“Combined with the numerous gold-bearing stockpiles and local exploration potential, this estimate provides the platform for early gold production based on the significant amount of [historic] study work conducted.”
Luiri Hill is an advanced gold project comprised of a large-scale exploration licence and a mineral processing licence over 31.38 square kilometres within the Matala Dome mineralised structure.
The area is believed to have significant potential for gold occurrences related to Matala Dome and the surrounding Katangan rocks, which may host iron oxide copper-gold-style mineralisation.
In May, Volt entered into an agreement with a South African company to conditionally acquire an 85% interest in Luiri Hill and realise near-term development opportunities.
The vendor will retain a 15% interest in the project and will assist Volt with government and local community engagement.
The Luiri Hill acquisition forms part of Volt’s strategy to establish a new gold business while progressing the development of its flagship Bunyu graphite project in Tanzania.
“The creation of a new gold business provides [our] shareholders with the opportunity to participate in the value accretion from gold exploration and development activities, particularly through leveraging [our] existing extensive networks in Africa,” Mr Matthews said at the time.
“A substantial increase in the gold price combined with Luiri Hill’s potential supports [our] ability to debt fund the project development to minimise future equity requirements and create real long-term value for our shareholders.”
Volt made its foray into West Africa’s gold space in early May when it acquired six permits over 388sq km of the Birimian Greenstone Belt in Guinea.
Luiri Hill history
Over $29 million has been invested in Luiri Hill to date and includes extensive reverse circulation and diamond drilling programs, mineral resource reports, metallurgical testwork programs and studies and feasibility studies by third party consultants.
Historic stockpiles of gold-bearing ore have been considered for their material value in terms of providing a funding mechanism for further studies to progress to a mining licence, advance environmental and other approvals, and transition to a development decision.
In 2016, China’s Yantai Xinhai Machinery entered a partnership agreement with Luiri Hill’s previous owner to arrange vendor financing through a loan for the design, build and operate (DBO) contract at Matala.
Yantai has an existing relationship with Volt as the preferred processing plant contractor for stage one of the Bunyu development.