OreCorp (ASX:ORR) has released its maiden resource estimate on its Nyanzaga gold project in Tanzania, Africa. This first resource estimate is an important milestone for the company as it would obviously want to fast-track the project towards development and production.
This first resource estimate does look quite encouraging as there’s a total measured and indicated resource of almost 18 million tonnes at an average grade of 4.04 g/t for 2.32 million ounces, whilst an additional 460,000 ounces at the same grade can be found in the inferred resource category. This sounds really impressive for an open pit project, but OreCorp’s main issue will be the almost vertical extent of the mineralization.
As you can see, the mineralization is positioned relatively vertical, which means the strip ratio to get to the bottom of any open pit will be quite high (we would even expect to see a double-digit strip ratio should OreCorp try to reach a depth of 350-400 meter with its open pit.
However, as the company has discovered the higher grade zones seem to be running deeper than 800 meters, we are pretty certain OreCorp will try to figure out how a two-step approach could work. It looks like it would make sense to start with an open pit, followed by an underground mining operations if a sufficient amount of high-grade underground ore could be confirmed. The company is currently raising A$16.2M from institutional investors, and there seems to be quite a bit of appetite for this company and its project.