Mandalay Resources Corporation (TSE:MND) (OTCQB:MNDJF) (FRA:R7X2) has reported further exploration success at the Youle deposit at its Costerfield mine in Australia, which is expected to lead to a longer mine life at 'significant' profit margins.
Since first ore was mined at Youle in August last year, the deposit has been a consistent producer of high-grades, the miner noted.
READ: Mandalay Resources lifts full-year consolidated gold-equivalent output guidance after strong 3Q in Australia
The latest drilling has uncovered a new high-grade domain around 100 metres (m) below current operations. Assays from this location include 99.8 grams per ton (g/t) gold and 0.2% antimony over a true width of 0.30m in one hole.
In addition, continued drilling to the north of Youle has thrown up intersects such as 0.27m at 186 g/t gold and 37.4% antimony.
"The continuation of significant gold grades at depth is confirming our expectation that the deposit will add significantly more high-grade mine life to Costerfield’s operations," said Dominic Duffy, the chief executive at Mandalay.
"Recent drilling has also indicated potential for significant extension to the historic Minerva Reef. This east dipping reef is situated 50m above current infrastructure and already dewatered by the Youle operations.
"A separate mining area close to Youle would not only add additional mine life, but would provide diverse scheduling options allowing for superior optimization of ore extraction."
During this year's drilling, the firm hit 12.6 g/t gold and 3.1% antimony over a true width of 0.24m in one hole, which Mandalay believes is the southern extension to the historically mined Minerva Reef area, on the eastern side of the group of historic workings.
Additional historic intercepts attributed to the Minerva Reef include 33.2 g/t gold and 2.1% antimony over a true width of 0.57m drilled by Mandalay in 2014, it also noted.
"The Minerva Reef is close to Youle infrastructure and has the potential to increase the life-of-mine resource if an economic panel of mineralization can be identified," the firm told investors.
Mandalay is focused on growing production at its gold and antimony operation in Australia, and gold production from its mine in Sweden to generate near term cash flow.
Shares added 3.61% in Toronto to C$1.72 each.
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