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NioGold Mining reports substantial increase in inferred and indicated resources at Malartic Project

NioGold Mining (TSX-V:NOX, Frankfurt:NG1) reported a large increase in the indicated and inferred resources at its Malartic Project in north-western Quebec.   The junior gold explorer has been undertaking additional drilling and modelling along a 3 kilometer segment of the Norbenite-Marbanite fault zone which includes and surrounds three past producing mines, Marban, Norlartic and Kierens.

Today the company reported that Mine Development Associates had calculated an updated resource for the project.  Inferred resources increased by 34% to 361,000 ounces, while indicated resources jumped 730% to 598,000 ounces. The combined indicated and inferred resource now stands at 959,000 ounces.  The resource calculation was based on the assumption of a 0.5 grams per tonne cut-off grade for mineralization above 200 meters, which could be extracted via an open pit operation, and a 2.5 grams per tonne cut-off grade for resources below 200 meters which would require underground mining.

NioGold Mining also noted that a further 170,000 ounces are currently classified as historical resources (pre- NI 43-101)

"Our work has proven that the southwest portion of the Malartic land holdings covers a much larger gold mineralised system than previously known, where over 1.5 million ounces has been mined or defined to date," said Rock Lefrancois, NioGold's President & COO. "A good portion of the Norlartic-Kierens resources are near surface mineralisation potentially amenable to open pit mining. As well, the Marban gold system, traced over 1.4 kilometres, holds substantial lower-grade mineralisation within the upper 250 metres from surface that deserves further evaluation at higher gold prices."

To date NioGold Mining has only exported a small portion of the 20 kilometer Norbenite-Marbanite fault zone, offering plenty of potential to add additional ounces to the project.  The company also noted that the current deposits are still open at depth.

"We are very confident that we can increase the ounces with in-fill and step-out drilling," added Lefrancois.

NioGold has the largest land holding (115 square kilometres) in the Malartic/Val d’Or mining camps. The landholding is located along the Trans Canada Highway 117, on a stretch dubbed the Golden Highway, as it links a large number of current and historic gold mines, gold development projects and gold milling facilities.  In total 45 million ounces of gold has already been produced along this section of the highway and there are known to be a further 15 million ounces of reserves.

There are a number of other important facts to understand about the location of NioGold’s projects in order to understand the potential of the company.  Firstly the properties lie on the two and a half billion year old Abitibi Greenstone belt, which at 270km in length is one of the world’s largest archean greenstone belts and which has already yielded 170M ounces of gold over the last century, yet only 10% of it to date has been explored. 

A second advantage is that the local infrastructure is excellent, with full-service towns nearby and access to road, rail, power, water, telecommunications gold milling facilities and an experienced labour force, all of which enables exploration and development to be cost effective.

Thirdly the properties are in Quebec which is very supportive to mining. In fact Quebec has been rated the best place in the world for mining investment according to each of the last two annual Surveys of Mining Companies conducted by the Fraser Institute, an independent research organisation.  Respondents like Quebec because of the favourable geology, knowledgeable policy makers, a commitment to development, a supportive policy environment which provides stability, certainty and an advantageous tax system (whereby NioGold receives up to 38% in tax credits for work performed in the field, allowing the company to use tax credits for refinancing with no dilution to the share structure). 

A further advantage about the location is that NioGold’s landholding includes both undeveloped gold zones and three historic mines which were mined in the 1960s and 1980s, producing 600,000 ounces at the time, and so these are known gold deposits which offer the opportunity to rapidly define resources.  Moreover the known deposits at the project are reasonably close to the surface and so can be accessed by ramp.  To date however the landholding has only been drilled to a maximum depth of 500 metres yet neighbouring properties have considerable mineralisation at depth, so there may be further blue sky potential at depth.