Kerr Mines Inc. [KER-TSX; KERMF-OTCQB; 7AZ1-FSE] on Thursday August 27 released an update on recent project development at its Copperstone gold project in Arizona.
The company has previously said it was planning for a 10,000-metre resource expansion drilling program at Copperstone. The program marks the second phase of resource expansion drilling and follows a successful 5,000-metre Phase one program.
Kerr recently sold its remaining properties in Northern Ontario to Orefinders Resources Inc. [ORX-TSXV; ORFDF-OTC] in a move that will allow Kerr to focus on its Copperstone Project.
The Copperstone Mine produced nearly 500,000 ounces of gold between 1987 and 1993 from an open pit. Remaining infrastructure includes offices, maintenance shops, lab, permitted tailings facility, processing facility and mill.
The mine is located in La Paz County, western Arizona, within the Walker Lane mineral belt and is road accessible from Phoenix.
Kerr recently announced results of a NI 43-101 independent pre-feasibility study and resource update. Highlights include average annual sales of 38,347 ounces of gold, initial capital of $22.7 million, and all-in sustaining cost of US$875/oz. The project hosts 175,093 ounces of contained gold in the proven and probable category.
On Thursday, the company said the second phase of resource expansion drilling has commenced.
The purpose of the first phase of the 2020 drilling program is step-out RC holes designed to increase ounces in the Copperstone and Footwall zones.
The Copperstone Zone is the underground extension of the same orebodyhistorically mined as an open pit. The aim is a resource expansion and conversion in areas near the initial stopes that the company hopes to mine.
Kerr said drilling will continue to focus on resource expansion by way of underground core drilling in the D and C zones, and surface RC drilling in the B, A and Footwall zones.
The company is continuing discussions with Sprott Resource Lending (Collector) LP regarding the balance of a Sprott Project Financing Package, subject to achieving defined project milestones. However, in view of the improved capital markets, the company is considering alternative forms of project financing that could further enhance the project economics by reducing the effective cost of capital while negating further dilution.
On Thursday, Kerr was unchanged at 14 cents.