The updated resource includes a high-grade core zone of 9Mt grading 2.2g/t for 630,000oz. The company will use this resource model for a feasibility study mine plan that it expects to finalise later this year.
"We were successful in converting nearly all the inferred resources into measured and indicated resources to potentially extend the planned mine life. … The high-grade core zone that can be accessed and mined in the early mining years is largely responsible for the one-year payback demonstrated in the September 2018 updated pre-feasibility study," said president and CEO Mike Mutchler in a statement.
Mining Journal recently visited the project and produced a site visit report.
The new resource estimate is based on 344 drill holes and included 44 new diamond drill holes and 11 new reverse circulation holes for a total of 12,701m of new infill drilling. The cut-off grade was increased to 0.5g/t to maximise the use of permitted space for waste rock dumps and a tailings area. Substantial additional mineralisation can be added at lower cut-off grades.
Amarillo plans to run the new resource model through the Whittle Consulting Prober optimisation model to produce an optimal mine plan for the FS. Engineering for the FS is underway, and Amarillo aims to submit an application for a License to Install mid-year with the FS to be completed in the second half of the year.
The new resource is based on an updated geological model which fundamentally alters the understanding of the mineralisation that has allowed the use of ordinary kriging as the basis of estimation as opposed to multiple indicator kriging used for previous estimates.
Shares in Amarillo (TSXV:AGC) closed at C27c valuing the company at $31 million. Its share price is even so far this year.