Highland Gold updates resource estimates for Mnogovershinnoye

The AIM-traded company said the estimates took into account data from the extensive near-mine exploration programme conducted at MNV in 2016, which included more than 14,000 metres of diamond drilling.

It said the data supported the extension of MNV's life of mine to 2022, as announced earlier in the year.

Total ore reserves increased to 500,400 ounces, compared to 245,618 oz previously estimated to remain from the last reserve audit conducted in 2012 and reported in the company's 2016 annual report.

“Mineral resources and ore reserves are diluted and based upon a gold price of $1,200 per ounce,” the company’s board explained.

“The cut-off grade for open pit mining is 1 g/t Au and for underground mining is 2 g/t.”

Mineral resources were reduced to 631,720 oz, compared to the 1.6 million oz reported in the 2016 annual report, as a result of employing a different approach to modelling and a higher cut-off grade.

That was done with the goal of optimising resources under both Russian and international standards, and therefore omitted resources with grades of lower than 2 g/t for underground mining.

“Due to the geological complexity of mineralisation, Micon has exercised further caution by assigning mineral resources to the indicated and inferred categories, and ore reserves to the probable category.”

The company was now carrying out additional surface and underground exploration at several of the ore bodies at MNV in 2017 with a view toward further increase reserves and extending the life of mine beyond 2022.

In addition, 4,300m of drilling was planned at the satellite Bear ore zone to the north this year.

That exploration programme had the potential to upgrade the current MNV mineral resources and reserves.