US junior miner Fortitude Gold Corp. (OTCQB: FTCO) released the maiden drill results from its County Line property in Nevada showing high-grade gold intercepts which included 6.10 metres grading 15.18 grammes per tonne gold (g/t) within 15.24 meters grading 7.66 g/t gold.
The drill results, the company’s strong cash position and the proximity to County Line to the miner’s main operations at Isabella Pearl mean that Fortitude Gold is well positioned to pursue future plans for this property. The property is 100% owned by the gold miner and includes several exploration targets.
County Line is located on the site of an open pit mine which was operational in the 1990-ties and used to produce close to 81,000 ounces of gold and 760,000 ounces of silver from two small pits. The latest drill programme focused on what used to be County Line’s main open pit and covered 35 holes on the former pit floor and the periphery of the main pit.
For comparison, the previous rock chip samples from the main pit averaged 2.2 g/t gold with cyanide bottle-roll tests on those samples yielding an average of 94.5% gold recovery in approximately two hours. In addition, third-party channel samples taken from the bottom of the pit included 23.70 meters grading 3.86 g/t gold, 33.50 meters grading 3.76 g/t gold and 27 meters grading 1.34 g/t gold.
Future plans tie in with Isabella Pearl
Following the latest drilling results, the company is already working to model this mineralization for tonnes, grade and mineral resource expansion with the next drill program already underway.
County Line is not far from Fortitude Gold’s main operating gold mine Isabella Pearl connected by 26 kilometres of a Nevada state route. The current exploration results mean that potential future County Line ore could be transported by trucks to Isabella Pearl for heap leaching.
“The goal would be to leverage our existing nearby process infrastructure for additional gold production at minimal capital expenditures and costs of production. With an already disturbed area from two small historic open-pits, and effectively mining the material as an aggregate to be hauled off with no other infrastructural impact at County Line, we believe the permitting time could be shortened dramatically,” said Jason Reid, CEO and President.
Financially, the company is set up well for future expansion plans with a strong cash position for a miner of its size. It finished the first half of the year with a strong cash balance of $40.7 million, and this is after it spent $2.4 million on fresh exploration and distributed $2.9 million to shareholders in the form of dividends. In the second quarter of this year, the company brought in $24 million in net sales, making a net income of $6.6 million or $0.27 per share.
Fortitude Gold’s working capital stood at $76.9 million at the end of June which means that it can not only run its operations smoothly but also go ahead with further exploration.
High gold price in the last quarter
During that quarter the average grade of the gold it mined was 3.36 grammes of gold per tonne of mined ore and the total cash cost stood at $646 after by-product credits per gold ounce sold. This is very good considering that the realised metal price during the quarter in question was $1,876/oz. Fortitude’s production guidance for this year is in the range between 36,000 and 40,000 oz this year – which tallies with its output from Isabella Pearl in the first half of this year of just under 21,000 ounces of gold and 32,550 ounces of silver.
