EDG: Inaugural Mineral Resource Sets the Stage at Reliance
What you need to know:• EDG announced an inaugural Inferred resource at its 100%-owned Reliance Gold Project of 1.45Moz at a grade of 2.30 g/t Au.
• The resource includes a near-surface, high-grade open pit resource of 1.12Moz grading 2.23 g/t Au, and 0.33Moz (2.58 g/t) underground, which remains open for expansion.
• Further, initial metallurgical results support recovery of a high-grade gold concentrate, and infill and expansion drilling provide additional near-term upside to this morning’s estimate.
• Endurance has initiated studies to complete a PEA on the MRE as the Company continues to advance the Reliance Project.
• EDG trades at a significant discount to peers (~US$35/oz vs. peers >US$100/oz). We are increasing our target price to C$0.90/share.
This morning, Endurance Gold Corp. (EDG:TSXV) announced an inaugural Inferred gold resource at its 100%-owned Reliance Gold Project in southwest B.C., totalling 1.45Moz at a grade of 2.30 g/t (19.6Mt), and was completed utilizing a gold price of US$2,500/oz. The resource represents a greenfield discovery advanced over the past five years with a drilling success rate of ~70% and a low discovery cost of ~$9/oz. The estimate includes a near-surface open-pit resource of 1.12Moz at a grade of 2.23 g/t, which utilizes a cut-off grade of 0.3 g/t, and 0.33Moz at 2.58 g/t underground at a cut-off grade of 1.0 g/t, which remains open for expansion along strike and at depth. Further, the Company has completed initial metallurgy test work, which supports a high-grade marketable gold concentrate. We are maintaining our BUY rating and increasing our target price to $0.90/share (previously $0.50/share) on EDG.
Endurance has plans to infill the open pit to expand and increase confidence in today’s estimate. The Company is also completing additional step-out and depth drilling to expand the underground component and will test early-stage surface anomalies along the Royal Shear trend, as well as five structures east of the resource, including the Olympic targets. The MRE assumed an 81% recovery from a high-grade concentrate, below the rougher flotation average of 84%, which utilized higher grade tests versus the MRE grade. Metallurgical test work continues to progress and is now focused on concentrate grade, recovery optimization, and the potential for antimony recovery. EDG plans to complete a PEA based on this morning’s Inferred resource and is initiating economic and engineering studies.
Endurance Gold is engaged in the exploration and development of mineral properties in North America and has not yet determined whether its properties contain ore reserves that are economically recoverable. The recoverability of the amounts expended on mineral interests by Co. is dependent upon the existence of economically recoverable reserves, the ability of Co. to obtain necessary financing to complete exploration and development of its mineral properties and upon future profitable production or proceeds from disposition of its mineral interests.
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