In another exploration update, Avnel Gold (AVK.TO) has announced it discovered more shallow and high-grade mineralized zones towards the west of the currently known resources at its Kalana project. With intercepts of 3 meters at 1.3 ounces of gold per tonne of rock as well as 4 meters of 22.5 g/t, the company’s geologists now think this zone might be the dip-up extension of Kalana Main’s vein 1.
The discovery of this zone could be very important for Avnel to convert more inferred resources into the measured and indicated categories which would increase the confidence in the geological structure at Kalana. On top of that, as the mineralization is quite shallow, this zone could be fast-tracked towards production as it has the potential to increase the cash flows early on in the mine life which would increase the NPV of the project.
Avnel plans to release an updated resource estimate by the end of the third quarter, and this updated estimate (which we hope will contain more ounces in the measured and indicated categories) will be used for the definitive feasibility study on the project which is expected to be released in the first quarter of 2016. Avnel Gold definitely is a company that belongs on your watch list.
Disclosure: The author holds a small long position in Avnel Gold. Please see our disclaimer for current positions.