These are good days for Red Back Mining (RBI-T) in the African country of Mauritania.
The company announced stellar drill results from its Tasiast Gold Mine in the country at the same time that the government of Mauritania issued key permits for the expansion of its gold production plant.
The company reported the results of 30 separate holes that all reported intersections of between 1.38 grams gold and 5.16 grams gold, at depths between 87 metres and 290 metres.
Highlight intercepts include: 92.7 metres at 2 grams gold, 25 metres grading 3.44 grams, 84 metres grading 2.89 grams gold, and 87 metres grading 2.16 grams gold.
All of those results come from separate holes and the company says all intersection approximate true widths. The holes were drilled down dip and along strike from previously drilled holes.
With the latest results Red Back has now intersected mineralisation 200 metres south of the previously delineated deposit — extending the strike length to 550 metres.
It is continuing to drill south along strike and will also begin to test the area along strike and to the north of the known mineralization in the near future.
“Only a small portion of the extensive green stone belt controlled by the company has been tested to date,” Red Back’s president and chief executive Richard Clark said in a statement.
But the company plans to get to know the green stone belt more intimately in the coming months.
It currently has four rigs on site dong infill and extension drilling on the known mineralized zone, while another two rigs carry out drilling on exploration targets within 30 km of the plant.
In all, the company plans to spend $13 million on exploration in the second half of the year and it expects to have a new resource estimate that incorporates the latest results done in September.
On the operations side of things, the news was good as well.
Red Back received government approval for a commercial dump leach operation and for a new tailings storage facility.
It says that the first three dumps – which hold roughly 2 million tonnes of ore — are now under irrigation.
With the approval of the tailings dam, expansion is now being ramped up to full commercial production which targets 2.5 million tonnes per year.
Beyond Tasiast, the unhedged Red Back owns the Chirano Gold Mine in Ghana where it is also drilling to add to its reserves and driving towards the completion of a major plant expansion.
In Toronto on Aug. 31 the company’s shares were off 8¢ to $11.37 on a day when the price of gold and gold stocks in general were down.
The company has 230 million shares outstanding, and its shares have performed well since announcing it was withdrawing its bid for Congo gold explorer Moto Goldmines (MGL-T) in light of a richer bid from Randgold Resources (GOLD-N, RRS-L).
Vancouver-based Red Back — which falls under the Lundin group of companies — announced it was stepping out of a potential bidding war on Aug. 5 and its shares have gained 14% since that time.
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