Shares of the company rose almost six per cent in mid morning trading, at nine cents apiece as at 10:23 am ET.
The NI-43-101 mineral resource estimate revealed that the Mankarga 5 deposit at Tanlouka has indicated mineral resources of 14.1 million tonnes at 0.94 grams per tonne (g/t) gold for 425,000 gold ounces, and inferred mineral resources of 29.1 million tonnes at 0.78 g/t gold for 729,000 gold ounces.
The estimate assumes a gold price of US$1,465 per ounce, and base-case mining costs of US$1.54 per tonne.
“This initial mineral resource estimate at Tanlouka, in particular the robust continuity of the mineralized zones is very encouraging, and together with preliminary metallurgical results recently released augers well for the development potential of the Mankarga 5 deposit,” said Channel president and CEO Colin McAleenan.
"We have been very pleased with the rapid pace and cost efficiency of exploration at the project, having been able to generate a mineral resource estimate of this magnitude within two years of discovery, at a 'discovery cost' of approximately $5 per ounce of gold."
Channel noted that the resource estimate assumes base-case mining costs that are based on heap-leach processing for oxide material and carbon-in-leach processing for sulphide material.
Metallurgical recoveries recently released were based on preliminary testing by SGS Canada on Mankarga 5 samples, and included 79 per cent gold recovery in oxide as a proxy for heap leach processing, and 89 per cent gold recovery in sulphide.
As anticipated, the total resource is contained within one open pit with a strip ratio of 2.1:1, said the company.
The resource estimate, done by AMEC Americas, was based on 71 core drill holes and 58 reverse circulation drill holes for a total of 22,536 metres drilled since June of 2010. The resulting estimate includes base case indicated and inferred resources for both oxide and sulphide mineralization at discrete cut-off grades for each mineralization type.
The Mankarga 5 deposit extends over a strike length of around two kilometres trending northeast-southwest and remains open along-strike as well as to-depth.
Channel said that the mineral resource estimate “is resilient to increases in cut-off grade”, which could play an important role if costs of production were to increase significantly over what has been assumed in the base case estimate.
The company’s activities at the Tanlouka gold project are focused on both advancing the Mankarga 5 deposit as quickly as possible through to feasibility and development, and showing the additional exploration potential of the project.
Highlights from recent drill results include hole DD39, which intersected 37.5 metres of 1.38 grams per tonne (g/t) gold and hole DD41, which hit 25.5 metres of 1.47 g/t gold.
Channel said upcoming news from the project includes results from 2,000 metres of core drilling recently completed in the area of the Mankarga 1 target, and also the investigatation of possible mineralized continuity between Mankarga 5 and Mankarga 1.
The company is also awaiting results from soil sampling programs underway on the Manesse and Tanwaka target areas to the north of the Mankarga Zone, on the 79-square-kilometre Tanlouka permit.
Channel noted that future drill programs and other exploration activities are being planned for Mankarga 5 and other targets on the Tanlouka project based on the results of current programs, and will be announced as news becomes available.
The Canadian exploration company is also advancing the Fox Creek lithium/potash brine project in Alberta, Canada.