There’s Gold in Them There Hills

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Management’s claim that this is one of the best gold projects on the planet may be a bit of hyperbole, but it does tick all the boxes as an exciting new resource located close to major communication and support infrastructure in a politically and economically stable country.

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The Curraghinalt gold deposit in the Sperrin Mountains, County Tyrone, Northern Ireland is owned by junior miner Dalradian Resources, which since the purchase of the resource in 2009 is said to have invested hundreds of millions of dollars, developing more than 2 kilometers of underground tunnels and more than 100,000 meters of drilling in order to prove the resource and qualify for planning consent.

Indeed, so compelling are the numbers and so attractive is the case that the only hitch seems to be that Dalradian’s Curraghinalt is situated in the center of an area of outstanding natural beauty, raising fears environmental objections may delay approval.

The local population appear largely in favor. The mine employs 100 people today, but in an area of high unemployment the prospect of an eventual 350 well-paying and steady jobs garners a lot of local support.

According to the Financial Times, previous planning applications in the 1980s failed in part because of difficulties getting an explosives licence during the Irish Troubles of the 1980s. True to our changing times, with those days behind us the objection now is on environmental grounds; specifically, the use of cyanide to extract gold from the mine’s ore and the impact of the mine on the local scenery.

Objections to the use of cyanide could be overcome by producing concentrate rather than partly refined doré bars, a semi-pure alloy of gold and silver, usually created at the site of a mine, which is then transported to a refinery for further purification. Selling the ore as concentrate or transporting it to a refinery elsewhere would overcome the problem, if marginally diminishing returns.

Returns, though, do not seem to be a problem. Following the drilling of more than 130,000 meters of samples, underground channel sampling, soil geochemistry analysis, sampling of historic cores and metallurgical testing, Dalradian Resources has released a 463-page report detailing the resource’s scope.

Specifically, the report states Curraghinalt should be good for:

  • Measured: 25,000 ounces of contained gold (0.03 million tons at 26.99 g/t gold)
  • Indicated: 2.07 million ounces of contained gold (5.58 million tons at 11.53 g/t gold)
  • Inferred: 2.31 million ounces of contained gold (7.13 million tons at 10.06 g/t gold)

With estimations based on a cutoff for gold content above 5 g/t, higher gold prices would justify a lower content number, but even at 5 g/ton, break-even is estimated at an after-tax gold price of U.S. $865/ounce. The Financial Times quotes the resource at 1.4 million ounces of reserves, worth some $1.8 billion at today’s prices.

The area has been known to hold the yellow metal for centuries. Gold was discovered in the gravels of the Moyola River to the east of the property as far back as 1652. Apart from an attempt in the 1930s to develop alluvial gold mining and exploration work in the 1970s, no one has made a serious attempt to scope the value of the resource or create a credible plan to exploit it.

With the media’s attention focussed on the north/south Irish border as part of the Brexit settlement, this new venture is missing the attention it would otherwise deserve.

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But the region may be plenty glad of its contribution in the years to come, particularly if the politicians manage to make as big a mess of the border question as current arguments suggest they will.

Comment (1)

  1. David says:

    Please let me assure you that the local community is not largely in support for it, check out the local and national news papers. they have very little support on the ground. I have been following this project and have unloaded from it because of the massive resistance to this project.
    There already has been a threat of a legal challenge on the pre-planning application consultation process which could delay the project considerably. With current political uncertainty there will also be major question marks hanging over the process also as no civil servant can rule on a project of regional significance.
    This project which I have been following due to the region for two years is far from certain and is one that I would be sceptical about even in the light of last months vote by the regions second largest political party to adapt a policy of no private mining licenses in the region or cyanide based processing. With Current bulk sample tests coming back with a 8g/t measure it wouldn’t be feasible to continue if this policy was pushed in to legislation.

    I think facts need to be verified before potential share holders or investors read these articles.

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