Silver Standard Resources (NASDAQ:SSRI) has announced the addition of mineral resources at the company's flagship Marigold mine in Humboldt County, Nevada, as a result of the company's exploration efforts. The mineral resources lie south of the 8 South pit and are comprised of oxidized gold, which is leachable using the company's run-of-mine heap leach process.
The company announced that the 8 South pit extension now contains indicated resources of 2.13 million tonnes (82,000 ounces of gold) at 1.2 g/t, and inferred resources of 1.7 million tonnes (75,000 ounces) at 1.41 g/t.
In a previous article on Silver Standard, I argued that shares were a buy as the company is a multi-mine precious metals producer with big growth potential from its silver and zinc Pirquitas mine and its Marigold mine. A big part of my investment thesis was centered around Marigold, which contains proven and probable reserves of 4.92 million ounces and produced 162,000 ounces of gold in 2013 and slightly lower production expected this year.
This news is positive because it shows that the company's exploration efforts at Marigold are paying off. The 8 South pit is a past producing deposit that produced 530,000 ounces of gold between 1987 and 1994, so I find it highly likely that Silver Standard keeps adding to the resource base and eventually mines from this high-grade deposit.
As a result of the positive results, Silver Standard will complete an additional 2,600 metres of drilling by year's end, and this is expected to be included in yet another resource update by the first quarter of 2015. I remain bullish on Silver Standard shares as cash costs from Marigold drop and exploration results continue to yield positive results.
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