Star Royalties Ltd (TSX-V:STRR) highlighted an updated resource estimate at Gold Mountain Mining Corp's Elk gold mine in British Columbia, where the former recently bought a 2% net smelter return (NSR) royalty.
The higher confidence measured and indicated (M&I) resource at the mine has been increased by 24% to 806,000 gold-equivalent ounces, while the inferred gold-equivalent ounce resource was lifted by 65%. There was a total 32% increase in gold-equivalent ounces across all categories.
"Only two months have passed since Star Royalties acquired a 2% net smelter return royalty on the Elk Gold Mine," noted Star CEO Alex Pernin in a statement.
"Our expectation of continued and significant drilling success has been quickly realized. The updated mineral resource demonstrates the exceptional wealth creation potential of our business model.
"Indeed, this increase in resources grows Star Royalties’ attributable ounces in the Elk Gold Mine by 32% since our acquisition of the royalty. We look forward to the results of Gold Mountain’s Phase 3 drill program in 2022."
READ: Star Royalties says 3Q revenue has exceeded its expectations as its Keysbrook asset continues to perform
Star Royalties also noted that Elk Gold’s multiple zone potential had been further demonstrated by ten diamond holes drilled at the Lake and South Zones, which had led to a maiden resource estimate in these satellite deposits.
In September, Star said it had agreed to acquire the existing royalty on the Elk gold mine from Almadex Minerals for about US$10.6 million.
The Elk gold mine was expected to begin generating revenue during the fourth quarter of this year, with royalty revenue anticipated to average US$2 million per year following the third year of production, based on prevailing gold prices, Star had reported.
It also noted that Gold Mountain’s updated preliminary economic assessment (PEA) on the Elk Gold Mine from May 2021 highlighted an 11-year combined open pit and underground operation with life-of-mine, all-in sustaining costs of US$554 per ounce.
Also in the statement, Star Royalties said it had retained Galt Advisory Services Inc (Galt Advisory ), an investor relations and strategy consultancy based in Toronto, Canada.
Contact the writer at giles@proactiveinvestors.com