Mandalay Resources Corporation (TSE:MND) (OTCQB:MNDJF) (FRA:R7X2) said last year's exploration efforts had boosted both its operating mines, with an almost doubling of proven reserves at its Australia mine and an uplift of underground reserves in Sweden.
The year saw "significant" growth at the Costerfield mine in Australia as resources and reserves were increased at the Youle deposit, noted the miner's CEO Dominic Duffy, adding this was the driving force behind the company's significant cash generation in 2020.
READ: Mandalay Resources releases positive results from depth drill testing at Lake zone, Björkdal mine
At Costerfield, proven and probable reserves as at end 2020 for contained gold and antimony increased by 25% (255,000 ounces versus 204,000 ounces in 2019) and 22% (21,800 tonnes compared to 17,800 tonnes in 2019), respectively, net of depletion for 2020.
The Costerfield mine life was also extended by one year to 2024, net of depletion for 2020 production.
"Costerfield exploration activities in 2020, coupled with 4,798 metres of on-vein development along Youle has provided a level of detail and confidence sufficient to convert and lift the proven reserves by 102,000 ounces of high-grade ore, on top of depletion replacement," added Duffy.
"Drilling deeper in Youle has identified two additional high-grade gold domains, which largely accounted for the increase to probable resources of 34,000 tonnes net of the large conversion to proven reserves. Further drilling after the data cut-off date on November 30, 2020, has shown additional high-grade depth extensions that outline a focus for further resources and reserves growth at Costerfield."
Across both mines, as at December 31, last year, total proven and probable reserves totaled 799,000 ounces of gold and 21,900 tonnes of antimony. That compares to 752,000 ounces of gold and 17,800 tonnes of antimony at the end of 2019.
Duffy added that at Björkdal, exploration last year had focused, not on adding reserves, but on identifying areas that could potentially add higher-grade mine feed.
"This program is proving to be successful with the identification of high-grade intercepts within the Lake Zone deeps and Aurora deeps programs," he said.
"During 2020, there was an increase in underground mineral reserves of 6,000 ounces of gold through the extensions of the Aurora and Lake Zone areas, however, this was offset by a reduction in open pit resources of 8,000 ounces of gold. This was the result of pit optimization works around the updated mineral resources model."
Proven and probable contained gold reserves at Björkdal at the end of 2020 stood at 544,000 ounces compared to 548,000 ounces a year earlier.
Looking to 2021, Duffy said Mandalay will be drilling a number of Youle analogue targets through the main Costerfield corridor alongside reserves growth drilling at Youle and Browns.
"While at Björkdal, a significant exploration campaign is underway with the emphasis on building gold grade and optionality in mining areas," he added.
"The four major areas of focus will be: identifying higher-grade areas within the Lake Zone and Aurora deeps areas, testing of high-grade veining extensions to the east, growth of resources within skarnified lenses and delineation and growth of Aurora," he told investors.
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