Conroy Gold Natural Resource (LON:CGNR), the AIM listed resource company exploring and developing gold and other natural resource projects in Ireland, has begun an infill drilling programme at its Clontibret gold target in County Monaghan. This move follows the completion of a scoping study by Wardrop Engineering which yielded positive results on both technical and financial grounds and its recommendation that infill drilling should proceed. The Conroy Gold and Natural Resources share prices gained 4.7% to 5.5p on the news.
Clontibret is the most advanced target on Conroy’s project area, which comprises a gold trend that stretches 30 miles from County Armagh across to Counties Monaghan and Cavan. The company has already established a 1 million ounce JORC compliant resource on the project. As part of the new programme, over 3,500 metres of infill drilling is planned initially. This will further define gold zones within the proposed mine area, potentially increasing the resource. The infill drilling will also provide geotechnical information for mine design purposes together with ore material for metallurgical test work.
The area of the scoping study comprises only 20% of the Clontibret target. The remaining 80% of the Clontibret target remains open and two other larger targets – Clay Lake and Glenish – lie in close proximity.
A conventional open pit operation was designed by Wardrop as part of the scoping study. A pit optimisation commodity baseline of US$970/oz gold price was applied for the purposes of the study with a potential gold recovery of 174,840 oz gold, a head grade of 2.13g/t oz gold, a process rate of 400,000 tonnes per annum, an assumed overall gold recovery of approximately 88% and a mine life of 7.2 years – giving an average annual production rate of over 24,000 oz of gold.
The economic evaluation was based on a pre-tax financial model, taking a base case commodity price for gold of US$1,144/oz. This gave a 17.7% internal rate of return (IRR) and a net present value (NPV), at 8% discount rate, of US$14.4m. Reflecting recent current gold prices, a rate of 20% over the base case – US $1,373, gives an IRR of 58.3% and an NPV of US$77.9m.
Conroy’s chairman, Professor Richard Conroy, said: “Following the positive technical and financial results of the scoping study by Wardrop on 20% of the target we have now commenced infill drilling to further define the resource. This is the next stage as we move towards developing a mine at Clontibret.”