Reunion Gold adds underground resource to Oko West, PEA expected in Q2

South America-focused Reunion Gold (TSXV: RGD) has tabled an updated mineral resource estimate for its Oko West project in Guyana, showing a substantial increase in both grades and contained gold since the first resource estimate was announced for the greenfield discovery in June 2023.

A total of 565 drill holes for more than 144,000 metres were used in the resource calculation. Most of the resource definition drilling at Oko West has focused on the Kairuni zone, which covers 2 km in the northern portion of the known 6 km gold-in-soil geochemical anomaly.

The new mineral resource included the first underground resource for the project, estimated from zones outside the constrained resources of the open pit. The bulk of the ounces are located in the Central underground zone, which represents a deeper extension of the high-grade zone in the Block 4 area of Kairuni.

Overall, the contained gold in the indicated category has increased by 72.4% to 4.3 million oz., calculated from 64.6 million tonnes of material grading 2.05 grams gold per tonne. Nearly all of the indicated gold ounces are open pit.

The underground resources are mostly in the inferred category, which totalled 1.6 million oz. gold contained within 19.2 million tonnes grading 2.59 g/t gold. The underground portion accounted for 1.1 million oz., while the open pit had 488,000 oz.

Moreover, the gold grades in the Oko West resource were higher in both the indicated and inferred categories, up 11.6% and 28.5% respectively, than that in the 2023 estimate.

“The increase in both the size and grade has the potential to add tremendous value to the Oko West project,” Rick Howes, Reunion Gold’s CEO, stated in a press release. “We are particularly encouraged by both the substantial increase in the open pit resource size and grade as well as the initial size and grade of the underground resource, which remains open below the 1 km depth of drilling to date.”

The next steps, according to Howes, is to incorporate both the open pit and underground resources into the upcoming preliminary economic assessment, which is expected before the end of Q2 2024.

Drilling at the project is also continuing in and around Blocks 1 through 6 of the Kairuni zone, focusing on resource conversion and exploration. The program is expected to take about 30,000 metres of diamond drilling, most of which will be used for converting the underground resources.

Shares of Reunion Gold went up by 3.7% to C$0.42 apiece by 2:50 p.m. ET. The company has a market capitalization of C$519.4 million ($384.4m).