Silver Standard Resources Inc. (SSRI, Financial)Â released the results from hole drillings its exploration team did on its Marigold mine in Nevada. The Canadian company also provided updated exploration results from the Seabee Gold Operation in Saskatchewan.
The results refer to drilling activities the company’s exploration team did on the two claims in the last quarter of 2016 and the first quarter of 2017.
At the Marigold mine, drillhole MRA6434 at the Mackay pit produced 1.09 grams per tonne of gold over 106.7 meters. Drillhole MRA6368 at the Valmy pit produced 0.57 g/t gold over 45.7 meters. Drillhole MRA6384 at the Battle Cry pit produced 0.51 g/t over 91.4 meters.
At Seabee, drillhole SUG-17-902 at Santoy 8A produced 21.89 g/t gold over three meters. Santoy Gap drillhole SUG-17-015 produced an uncut grade of 1,004.74 g/t gold over 1.6 meters. Drillhole JOY-16-749 at Santoy intersected 8.2 g/t gold over 9.9 meters.
What do these drilling results mean?
In regard to drillhole MRA6434 at the Mackay pit of Marigold mine, the company says  the exploration team intersected 1.09 g/t gold over 106.7 meters.
These findings mean that at 106.7 meters, the exploration team found a deposit of valuable mineral grading 1.09 grams of gold per tonne of ore. They also found a richer strike of ore over a subspace of 18.3 meters in the wider part of the mineralized area. This subsection grades 4.10 grams of gold per tonne of mineral.
The values 1.09 g/t and 4.10 g/t measure the concentration of gold in the mineralized length. Of course, the higher the concentration, the richer the deposit. These drilling results tell us the company is uncovering profitable deposits of gold adjacent to the Marigold mine. The higher gold concentration in the mineral suggests the company will mine and process gold from these deposits at low sustaining costs, giving the miner more flexibility when it has to adjust operations in response to changes in the price of gold. Therefore, the economics of Silver Standard will not be significantly affected when gold trades low on the market.
With the drillings at the Mackay pit, the company is focusing on upgrading Marigold’s mineral resources to the category of reserves. With the drillings at Valmy and Battle Cry, the company is increasing the volume of mineral resources.
The exploration team also uncovered valuable deposits of gold at Seabee. For instance, from drillhole SUG-17-902, the exploration team found one of the highest concentrations of gold - 21.89 grams of gold per ton of ore - in a vein that is three meters thick.
The company says exploration activities at Seabee are focused on upgrading existing mineral resources and on discovering additional inferred mineral resources.
Why are these results important to investors?
First, these results are important to investors because the company is hoping to create long-term value by extending the life of its mines.
Secondly, Silver Standard Resources is running a minimal risk from these brownfield explorations since a modest amount of capital is required for construction and mining equipment.
President and CEO Paul Benson commented on the company’s exploration results.
"Our exploration programs at Marigold and Seabee continue to deliver positive results that demonstrate resource growth potential," Benson said. "We were pleased with the significant increase in mineral reserves at both operations at the end of 2016 and are confident that our exploration activities this year, supported by strong in-house expertise and expenditures of $5 million at each mine, will once again have a positive impact on our year-end mineral reserves.”
Silver Standard Resources is currently trading around $10.08 per share, down four cents or -0.40% from the previous trading day, with a price-book ratio of 1.33 and an EV/Ebitda ratio of 4.99.
Disclosure: I have no positions in Silver Standard Resources Inc.
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