Velocity Minerals (VLC.V) has released an updated resource estimate during the PDAC conference in March. This resource estimate contains an updated calculation of the inferred resources on the Rozina gold project in Bulgaria. Using a cutoff grade of 0.5 g/t, the deposit contains 17 million tonnes at 1.15 g/t for a total resource of 629,000 ounces. If you’ apply a higher cutoff grade of 0.8 g/t, you’d still end up with 8.2 million tonnes at 1.68 g/t gold for 443,000 ounces of gold.
This resource update contains 7,500 meters of new drilling, whilst Velocity plans to drill an additional 5,000 meters which will result in an additional resource update, to be used in a Preliminary Economic Assessment, due in the second half of this year. We are mainly looking forward to see more metallurgical test results as well as the estimated strip ratio for this open pit deposit. Considering 90% of the resource is located within the first 110 meters from surface, we would expect the strip ratio to remain acceptable.
Using the company’s disclosed footprint of 780 by 600 meters, it looks like a total of 75-100 million tonnes will have to be excavated, which would result in a strip ratio of 3-5 (over the entire mine life. The strip ratio in the first few years appears to be lower as the mineralization starts close to surface). This is a moving target, and we’d expect the strip ratio to decrease as Velocity continues to drill in 2018. The newest drill results from the East Zone seem to confirm the thick mineralization starting just 1-2 meters downhole and this will have a positive impact