This Nevada-focused gold player has finished its record 2020 on a high with key exploration and reserve updates…
Expanding production, booming gold prices, strong exploration success…
The Nevada producer has hit company record after company record this year, notably delivering its best-ever quarterly cash flow (US$10.5m) and earnings (US$5.7m) figures in results released in August.
And this excellent progress in the face of the Covid-19 pandemic has not been missed by the market. Since the middle of March, shares have nicely risen in value to reach the C$1.50 they sit at today.
In the past month, the company has crossed not one, but two operational milestones that put it firmly on the road to meeting its long-term goal of becoming a 150,000-ounce-a-year gold producer.
Replenishing ounces at Pan
The company recently completed a large programme of expansion drilling in the vast land package surrounding this producing open pit, heap leach project. The goal was simple – to define more gold reserves and resources to extend Pan’s life of mine beyond the three years at which it had sat.
In December, the firm revealed an upgraded Proven and Probable Mineral Reserve estimate of 290,500 ounces (“ozs”) for the mine alongside updated Measured and Indicated resources of 427,400ozs.
This is significant for two reasons.
First, assuming that mining rates continue at-or-around this year’s level, Pan’s new reserve estimate extends its life of mine out by a further two years to 2025.
Remember this date- it will become all the more critical shortly.
Second, the updated 290,500oz mineral reserves figure for Pan is right up there with the 318,000ozs published in Fiore’s (TSX-V:F│OTCQB:FIOGF│FSE:2FO) first estimate made back at company inception in 2017.
RESERVE AND RESOURCE UPDATE
|RESERVE||TONS (000s)||GRADE (oz/st)||GRADE (g/t)||CONTAINED GOLD (Au koz)|
|PROVEN + PROBABLE||23,457||0.012||0.42||290.5|
|PROBABLE LEACH PAD||26|
|TOTAL PROVEN + PROBABLE||317|
All the better, the exploration dollars spent on replacing these reserves and resources – around US$1.5 million annually – have come without any dilution from shareholders through equity raises or taking on corporate debt.
There’s plenty more unexplored ground around Pan and a new programme of resource and reserve expansion is now underway…
“FIORE’S EXPLORATION TEAM HAS ONCE AGAIN ADDED RESERVES AND EXTENDED THE MINE LIFE AT THE PAN MINE WELL INTO 2025. OUR UNDERSTANDING OF THE GEOLOGY AND CONTROLS ON MINERALIZATION AT PAN HAS IMPROVED TREMENDOUSLY OVER THE PAST THREE YEARS AND THE TEAM WAS ABLE TO SUCCESSFULLY TARGET NEW AREAS OF MINERALIZATION PARTICULARLY AROUND THE NORTH PIT, AS WELL AS IDENTIFYING POTENTIAL NEW AREAS SUCH AS THE MUSTANG TARGET.”
“THE NEXT PROGRAM OF RESOURCE AND RESERVE EXPANSION DRILLING IS ALREADY UNDERWAY AT PAN, AIMED AT DEFINING THE RESOURCES THAT SHOULD SEE PAN CONTINUING TO OPERATE FOR MANY YEARS TO COME.”
TO READ MORE ABOUT FIORE GOLD’S PLANS TO BECOME A 150,000 OUNCE-A-YEAR PRODUCER, GET OUR FREE REPORT
On track at Gold Rock
With an estimated 403,000 ounces of indicated gold and 84,300 ounces of inferred gold at grades 30% higher than Pan, Gold Rock is the company’s core growth engine.
The project is already federally permitted. It is based just eight miles away from Pan, so existing infrastructure and management can be shared. And a recent preliminary economic assessment gave the project a post-tax NPV of US$99.4 million and a post-tax IRR of 39.1% based on 55,800 ounce-a-year production at a US$1,700 gold price.
In a November update, the firm revealed the first set of results for its 2020 drilling at the project. The work delivered some of its best intercepts to date, including 48.8 meters of 2.17 grams per ton gold, 32 meters of 1.41 grams per ton gold, and 38.1 meters of 1.11 grams per ton gold.
Critically, this drilling programme will be used to expand resources for the Gold Rock Feasibility Study. And in its update, Fiore (TSX-V:F│OTCQB:FIOGF│FSE:2FO) also revealed that many other work programs in support of this work are progressing well.
This includes large diameter metallurgical core holes and the first round of HQ core holes, including detailed geotechnical logging, with geological logging and sampling underway.
This would be transformational.
With Pan’s mine of life now extended out to 2025, Fiore (TSX-V:F│OTCQB:FIOGF│FSE:2FO) would be primed for meeting its long-running operational goal of having the two projects operating in unison. This would take total gold production to more than 100,000 ounces-a-year.
Meanwhile, work to find a third project that adds another >50,000 ounces of annual production is also well underway.
On a transformational growth path
This obviously means increased cash flows in a mining sector where cash is very much king…
But it also puts the business firmly in the sights of institutional mining investors with the financial firepower to propel it to even greater heights.
Fiore’s (TSX-V:F│OTCQB:FIOGF│FSE:2FO) share price has already risen well this year. But if the company’s momentum continues, then even these strong returns could be far outstripped by the long-term value on offer.
DOWNLOAD OUR SPECIAL REPORT FOR A DEEP DIVE INTO FIORE GOLD’S LEADING NEVADA-WIDE GOLD PORTFOLIO
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