Prodigy Gold (CVE:PDG) announced Thursday further encouraging drill results from its Magino gold project in Ontario, on the northeast part of the property, as part of an infill and resource expansion campaign.
Drilling during the last month has focused on three areas, including the northeastern higher grade portion of the Magino deposit, and two lower grade areas in the central and southwest parts.
In the northeast target area, drilling intercepted thick intervals of gold mineralization, with 104 metres grading 1.01 grams per tonne (g/t) gold, including 36 metres grading 2.33 g/t gold in drill hole MA11-056.
Other notable results included 168 metres of 1.00 g/t gold and a deeper zone grading 3.88 g/t gold over 8 metres in drill hole MA11-083; and 182 metres of 0.82 g/t gold, including 20 metres grading 2.66 g/t gold in drill hole MA11-081.
These results, when combined with previous drill results in the area, indicate that the Magino gold resource can be expanded in this higher grade portion of the deposit, the company said.
"The continuing success of our 45,000 metre in-fill drilling program confirms our expectations: identifying areas for gold resource expansion and defining the extents of this large gold deposit," said president and CEO, Brian J. Maher.
"We are on schedule for releasing an updated resource estimate for Magino in late September and a revised PEA in October, paving the way for a full feasibility study in early 2012."
Detailed metallurgical test work is underway at the property, with geotechnical drilling largely completed. The company is also set to transition from in-fill drilling to exploratory drilling at Magino, seeking to delineate the ultimate size of the gold system.
The open-pit Magino mine currently contains indicated gold resources of 1.9 million ounces grading 1.16 g/t gold and 587,100 ounces of inferred gold resources at 1.04 g/t gold. The latest scoping study showed a pre-tax net present value of $351 million, and an internal rate of return of 49%, using a 5% discount rate.
The proposed operation is expected to have an average annual gold output of over 166,000 ounces a year during a nine year project life. Total gold production is estimated to be 1.50 million ounces at cash costs of roughly US$496 per ounce.