(MENAFN - ProactiveInvestors - Australia) MOD Resources (ASX: MOD) has three diamond rigs turning at the Sams Creek Gold Project in New Zealand and has inked a 33 per cent increase to one million ounce JORC gold resource in the process.
This represents quite a change and value add as the Company was a biotech company in 2010.
The resource increase had been achieved at a discovery cost of 7.50 per ounce when the price of gold in New Zealand dollars is around NZ2,000 per ounce.
The new inferred resource estimate for Sams Creek is 18.65 million tonnes @ 1.71g/t, at a 0.7g/t cut-off.
Significantly, the resource is all contained within an 800 metre strike length of the Main Zone prospect, which represents less than 15% of the known 6 kilometre strike length of the Sams Creek dyke. The Main Zone resource remains open at depth.
While early days in the drill program, that MOD Resources was able to increase the resource at Sams Creek by 33% to more than 1 million ounces from just an initial 9-hole drilling program would provide the Company with significant encouragement.
Also of interest, Sams Creek is known to be an intrusive-related gold deposit. Other similar types of gold deposits are very large " including Fort Knox and Donlin Creek in Alaska, Vasilkovskoe in Kazakhstan and Kidston in Australia, indicating that MOD Resources might be onto a very interesting project with significant potential to increase the resource with further exploration.
The aim of this program is to achieve a 60% interest in the Sams Creek permit under the joint venture with tripled listed OceanaGold Corporation (ASX/TSX/NZ:OGC).
MOD is earning up to 80% of Sams Creek from OceanaGold by sole-funding staged exploration programs. New Zealand Petroleum & Minerals agreed to extend the Sams Creek exploration permit for five years to March 2017 following the successful completion of the stage one drilling program.
Stage two drilling program is continuing with 3 diamond rigs at work at Sams Creek.
MOD Resources is one to watch given the 1 million ounce resource and its low market valuation. In addition, the Company is preparing to drill for copper and silver at its Botswana Copper project - with a maiden resource due final assays are received.
Throw into the mix, Miles Kennedy is chairman of MOD Resources, who was behind Macrae's Mining which produced more than 3 million ounces of gold over 20 years. Kennedy was also chairman of Sandfire Resources (ASX: SFR), which has made one of the largest base metal discoveries in Australia in the past 25 years at DeGrussa.