Metals Exploration disappoints investors with lower resource estimates at Runrun
19 November 2009
Metals Exploration has been forced to launch a damage limitation exercise after a new JORC-compliant update for its Runruno gold and molybdenum project in the Philippines slashed its resource estimates.
Since July this year, the AIM listed mining group has been working with independent consultants from Mining Associates to interpret new drilling data and update the last resource estimate for Runruno which was published in October 2008.
The downside of this exercise has been to reduce the total amount of gold – including measured, indicated and inferred – to 1.5 million ounces from 2.0 million ounces previously. The total estimated amount of molybdenum has also fallen to 25.4 million pounds from 34.4 million pounds.
Partly offsetting some of this bad news is the fact that the new survey has promoted some previously inferred resources into the measured category. That means Metals Exploration can accurately say it is sitting on 560,000 ounces of gold, up from 270,000 ounces. However, the indicated and inferred categories, which are less accurate estimations of gold in place, have fallen as a result.
The new resource update took a detailed look at a much larger area – 9.1 million tons – that the previous survey, which measured 3.6 million tons. As a result the grams-per-ton of gold in the measured category has been diluted from 2.37 to 1.92, which is also unwelcome news.
The company blamed the disappointing new findings on a combination of previously inferred tonnage to the south, west and north of the deposit not being supported by recent drilling, together with a lower overall grade because of the inclusion of lower grade and waste material into resource blocks within the model.
It said it was now changing the ongoing feasibility study for Runruno to reflect the new resource estimates. Today’s news came as Gary Powell, an executive director of the company, announced his resignation from the company.
Shares in Metals Exploration were suspended on Tuesday this week (17 November) ahead of today’s news, but trading was set to begin again today.
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