Joint-venture partners Iamgold (TSX: IMG; NYSE: IAG) and Vanstar Mining Resources (TSXV: VSR; US-OTC: VMNGF) have boosted the total metal content by 63% at their Nelligan gold project in central Quebec.
Iamgold and Vanstar currently own 75% and 25% of Nelligan, respectively, after signing an option agreement in 2014. The latest resource estimate updates the first resource that was completed in 2019 on the project, which is about 60 km southwest of Chibougamau in the northeastern part of Quebec’s Abitibi Greenstone Belt.
Nelligan now has an indicated resource on a 100% basis of 72.2 million tonnes grading 0.85 gram gold per tonne for 2 million oz. of contained gold. Inferred resources measure 114.1 million tonnes averaging 0.88 gram gold per tonne for 3.2 million ounces. The resource used a cut-off grade of 0.35 gram gold per tonne, compared to the 2019 resource, which was based on a 0.5 gram gold cut-off grade.
While the new resource has boosted Nelligan’s tonnage by 92% compared to the 2019 estimate, gold grades declined by 15%. Iamgold drilled 53 holes (22,045 metres) between 2020 and 2022, which refined the deposit and structural models, the companies noted in a press release, and resulted in the conversion of 62% of the inferred resource to the indicated category.
The new resource also incorporated an additional 24 historic drill holes that were “previously located outside mineralized domains,” according to the press release.
The partners plan to drill 10,000 metres this year at Nelligan and “test newly defined exploration targets outside of the resource area,” Vanstar president and CEO J.C. St-Amour, said in the news release.
Iamgold’s executive vice-president for growth, Craig MacDougall, also noted Nelligan’s “favourable” potential for more resource expansion.
“The deposit has areas within the resource pit shell, along strike and at depth that remain open for further drilling,” he said, adding that “our exploration efforts continue to highlight the significance of this pure grass-roots discovery.”
Under the 2014 agreement, Iamgold has the option to earn an additional 5% stake for a total of 80% in the project by completing a feasibility study. Vanstar would retain 20%.
In 2019, the Quebec Mineral Association named Nelligan the “Discovery of the Year.”
Vanstar has traded in a 52-week range of 27¢ and 43.5¢ and in late morning in Toronto traded at 38.5¢, up 2.7% on the day. The junior has about 58 million common shares outstanding for a market cap of $22.2 million. Iamgold, which over the last year in Toronto has traded in a range of $1.27 and $4.74 per share, traded at $3.59 per share, up 2.1% on the day. The mid-tier gold producer has about 479 million common shares outstanding giving it a market cap of about $1.7 billion.