Equitas Resources (EQT.V) has announced it has commenced an extensive exploration program at the Baldo zone which is part of its newly-acquired Cajueiro gold project in Brazil. The initial exploration program will considt of approximately 700 meters of trenching whilst drilling a total of 1,600 meter in 20 holes.
This does indicate Equitas is primarly targeting near-surface mineralization as the average depth of the drill holes will be 80 meters, and that’s consistent with its approach to increase the total amount of ‘mineable’ ounces at Cajueiro. The Baldo zone currently contains approximately 30,000 ounces of gold at an average grade of just over 3 g/t gold which is quite high for an open pit target. Considering the total strike length at Baldo is approximately 650 meters, it shouldn’t be too difficult for Equitas to expand the total resource estimate.
The company has already identified several drill targets based on a sampling program and as this part of the project has only seen very limited drilling in the past (according to Equitas only one hole has been drilled at this structure, intercepting almost 30 meters of 1.5 g/t gold), the Baldo zone actually offers a very interesting exploration target.
As you can see in the previous image, the drill holes will be aimed to encounter the extension of an already known mineralized zone, and even though it’s still too early for the company to talk about exploration targets, there’s nothing stopping us from trying to figure out our own estimates. The strike length is approximately 650 meters and according to the map, the true width of the anticipated mineralization is roughly 40 meters. We will also assume an average depth of 20 meters (and yes, we admit this is completely arbitrary, it might be 10 meters or 40 meters, but assuming the previous drill intercept of 30 meters (which wasn’t the true width) we’ll use 20 meters as our base case scenario).
This results in a volume of 520,000m³ and using a density of 2.60, and that’s 1.35 million tonnes of rock. Assuming an average grade of 2 g/t, it should be pretty easy for Equitas to add almost 100,000 ounces of gold should the mineralization be confirmed over the entire strike length. Of course, there are no guarantees, but we just wanted to share the bigger picture of what this could really mean for the company with you.
We will be meeting with Equitas Resources next week in Vancouver and will have a better understanding of the exploration and production plans after our meeting.