Newmarket Gold finds even more gold
On September20,2016 Newmarket Gold issued a new press release that told investors of their new drilling results near the Fosterville mine in Australia.Essentially they said that they found near-mine high grade gold in their Lower Phoenix gold system. They had results from 96 drill holes and most contained high grade intercepts.Interestingly they found a new west dipping lode within the Lower Phoenix Footwall.The Lower Phoenix gold system is south of the main gold bearing structure which contains the Central, Harrier and Phoenix gold systems.Much of the new discoveries are in or near the Lower Phoenix structure;this gives the new west dipping lode added significance.Gold mineralization was measured at 525 grams /tonne at best and 100 grams /tonne at the lowest.This is much higher than that found in most gold mines which may come in at 3 to 8 grams /tonne.But it is the size of the ore body that is not yet known.
The Cosmo mine
Before Newmarket Gold was called Crocodile Gold and basically had the same assets as now although now the size of the Fosterville asset is larger.Originally Crocodile Gold consisted largely of the Cosmo mine which is north of the other mines;it is in the Northern Territory.Their production is smaller than that of the combined production from the mines in Victoria State .But recently Newmarket has done a lot of exploratory drilling and found 3 new lodes at the Cosmo mine with high grade gold.Newmarket needs to develop this asset faster in order to be less reliant on the Fosterville and Stawell mine in Victoria State.
Crocodile Gold also had a deposit at Maud Creek which is close to the Northern Territory.No development was done here for quite a while but recently Newmarket Gold completed an economic feasibility study and it will be profitable at low interest rates.Development here would also make Newmarket Gold less reliant on the two mines in Victoria State.
Newmarket Gold has a good cash flow and needs to develop it's other resources at a faster rate.There can be no doubt that the ore body at their Fosterville mine is very large but they are not using it to increase production.Now they have found a new lode at the west end of the Lower Phoenix structure plus deposits at the Eagle fault,East Dipping and Kestrel structures.In order for the Fosterville mine to increase production it needs another mine entrance probably in the southwest which is where the new west lode of the Lower Phoenix structure is located.This would allow extraction at two locations, not one.
Conclusion
It is true that both the size of the ore body and the grade of gold at the Fosterville mine is higher than originally expected.The ore body has been re-evaluated two or even three times.But this is of little use to investors if the production has not increased.They have only changed production guidance by 15,000 to 20,000 ounces.This blog recommends that a second mine entrance might help to solve this problem and the new discovery on the west lode of the Lower Phoenix structure might provide a new entrance.But it is possible that increases in production have been restricted in some manner by the former owner-Aurico Gold.If so these restrictions would only apply to the Fosterville and the Stawell mines.There would be no restriction on the Cosmo mine with it's new increased ore body nor on the Maud Creek mine which has not been opened yet.This blog recommends that these assets be wrapped into the former Crocodile Gold and it become active again. The sole owner of Crocodile Gold would be Newmarket Gold and there would be no restrictions on it's production.This would increase the total production and the market capitalization of Newmarket Gold. use Blogdaleupsome for analysis of resource stocks ; use Blogdaleupsome for consulting on resource stocks
The Cosmo mine
Before Newmarket Gold was called Crocodile Gold and basically had the same assets as now although now the size of the Fosterville asset is larger.Originally Crocodile Gold consisted largely of the Cosmo mine which is north of the other mines;it is in the Northern Territory.Their production is smaller than that of the combined production from the mines in Victoria State .But recently Newmarket has done a lot of exploratory drilling and found 3 new lodes at the Cosmo mine with high grade gold.Newmarket needs to develop this asset faster in order to be less reliant on the Fosterville and Stawell mine in Victoria State.
Crocodile Gold also had a deposit at Maud Creek which is close to the Northern Territory.No development was done here for quite a while but recently Newmarket Gold completed an economic feasibility study and it will be profitable at low interest rates.Development here would also make Newmarket Gold less reliant on the two mines in Victoria State.
Newmarket Gold has a good cash flow and needs to develop it's other resources at a faster rate.There can be no doubt that the ore body at their Fosterville mine is very large but they are not using it to increase production.Now they have found a new lode at the west end of the Lower Phoenix structure plus deposits at the Eagle fault,East Dipping and Kestrel structures.In order for the Fosterville mine to increase production it needs another mine entrance probably in the southwest which is where the new west lode of the Lower Phoenix structure is located.This would allow extraction at two locations, not one.
Conclusion
It is true that both the size of the ore body and the grade of gold at the Fosterville mine is higher than originally expected.The ore body has been re-evaluated two or even three times.But this is of little use to investors if the production has not increased.They have only changed production guidance by 15,000 to 20,000 ounces.This blog recommends that a second mine entrance might help to solve this problem and the new discovery on the west lode of the Lower Phoenix structure might provide a new entrance.But it is possible that increases in production have been restricted in some manner by the former owner-Aurico Gold.If so these restrictions would only apply to the Fosterville and the Stawell mines.There would be no restriction on the Cosmo mine with it's new increased ore body nor on the Maud Creek mine which has not been opened yet.This blog recommends that these assets be wrapped into the former Crocodile Gold and it become active again. The sole owner of Crocodile Gold would be Newmarket Gold and there would be no restrictions on it's production.This would increase the total production and the market capitalization of Newmarket Gold. use Blogdaleupsome for analysis of resource stocks ; use Blogdaleupsome for consulting on resource stocks
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