VANCOUVER (miningweekly.com) – Junior gold producer Anaconda Mining has started work on an expanded 7 000 m second-stage drilling campaign at its Goldboro project, in Nova Scotia.

The 4 500 m drilling programme will focus on the East Goldbrook and Boston Richardson gold systems of the Goldboro deposit. 

The Toronto-based company said the aim of the campaign is to test the underexplored portions of the deposit, which have the potential to expand or upgrade mineral resources, particularly in the areas identified for development within the recently announced positive preliminarily economic assessment (PEA).

The drilling programme is fully funded by a flow-through financing that closed on October 31, 2017.

According to the recent PEA, the Goldboro project could have a life of 8.8 years from an openpit resource grading 2.99 g/t gold during the first three years and underground ore grading 6.83 g/t subsequently. The mining rate is expected to average 600 t/d of ore, plus 200 t/d of stockpiled low-grade openpit ore. The ore will be processed at Anaconda's Pine Cove mill, in Newfoundland, producing a total of 375 900 oz of gold during this period.

The after-tax net present value, when applying a 7% discount, is C$61-million, and the internal rate of return is 26%, for a 2.9-year payback period. Total capital expenditure will be C$89-million, including pre-production expenditures of C$47-million.

The Goldboro project is expected to have an after-tax undiscounted cash flow of C$106-million. Over the life of the mine, the all-in sustaining costs are expected to be about $640/oz.

Based on a 0.5 g/t gold cutoff grade, the openpit has measured and indicated resources of 1.1-million tonnes averaging 3.01 g/t gold and inferred resources of 45 000 t grading 2.54 g/t. The underground operations, using a 2 g/t cutoff, has measured and indicated resources of 3.6-million tonnes averaging 4.48 g/t gold and inferred resources of 2.5-million tonnes at 4.25 g/t.

"Expansion drilling continues to demonstrate that there is potential for further mineral resource growth. In addition, our infill drilling will bring more confidence to the known deposit area where we have intersected more high-grade gold and identified new zones of mineralisation not previously identified during wider-spaced historic drill campaigns," CEO Dustin Angelo stated.