In the proven and probable reserves category as at the end of 2014, contained gold (Au) increased by 136% from a year earlier; contained silver (Ag) decreased by 5%, and contained antimony (Sb) increased by 4%.
The reserves estimates apply to Mandalay’s Björkdal, Cerro Bayo and Costerfield properties only.
The eye-popping increase in gold reserves is due to the acquisition of the Björkdal Au mine, where a new independent estimate has identified 432,000 ounces (oz) in probable mineral reserves.
In the measured and indicated resources category, contained gold increased by 144% and contained silver increased by 24%. Antimony increased by 12% and contained copper dropped to zero, owing to the La Quebrada asset being removed from estimates, as it is up for sale.
At Cerro Bayo, new reserves were added by infill drilling along extensions of the Coyita and Yasna veins under Laguna Verde, where initial high-grade intercepts were obtained in late 2013.
Mandalay said neither of these veins are completely drilled out and it expects further additions to mineral reserves as it continues to extend its closely spaced drilling in these veins.
At Costerfield, the company filled in previously inferred mineral resources, and further resource and reserve additions are expected this year, as underground drilling continues.
“Mandalay’s mineral resource and reserve position has improved significantly and has been substantially de-risked with the addition of Björkdal to the portfolio; the replacement of depleted reserves at both Cerro Bayo and Costerfield; and the upgrading of Inferred to Indicated Resource,” said Brad Mills, chief executive of Mandalay.
With the completion of the independent study at Björkdal, Mandalay now has a high quality, independent mineral resource and reserve estimate, Mills noted.
“We will use this as a base line against which to measure future exploration success, improved mining practices, and optimisation between surface and underground mining.
“The initial 432,000 oz Au reserves will support approximately an eight year mine life at current production rates; based on the Elgin acquisition price of approximately US$64.9 million, the acquisition cost of this reserve is $150/oz Au equivalent for this producing asset,” Mills added.
Meanwhile, at the Challacolla asset in Chile, the infill drill program succeeded in upgrading some 22mln ounces of silver in the main Lolon vein from the inferred to the indicated category, setting the stage for conversion to reserves when the feasibility study is completed.
“There remains approximately 7 million oz Ag in the Inferred Mineral Resource along the Lolon vein that potentially can be upgraded, as well as additional exploration targets with existing mineralized intercepts which can be followed up in the future,” Mills noted.