Tanami Gold has 1.5 million ounces of gold in JORC resources. The company is embarking on a mammoth drilling program with the aim of increasing gold production to 200,000 ounces per annum. In a geological sense the address is an excellent one and the chance of making a major find to transform the nature of the company is reasonable. Tanami recently announced that it has started the biggest drilling program in the companys history. Tanami is going all out to increase ore resources and reserves and is testing a number of deep conceptual targets for the first time. We think that the resource base will probably be at least doubled with the chance of a major discovery.
The Tanami Desert hosts two outstanding gold mines, Callie and the Granites. Underground grade at the Granites was between 6 and 10 g/t gold. In one year the Granites produced over 400,000 ounces of gold. The Callie mine produced gold at a similar rate.
The Tanami Desert is elephant country for gold mines. It has often been shown that drilling deep pays big dividends.In any event, finding resources to take production to 200,000 ounces per annum seems assured.
TAM Price at posting:
3.4¢ Sentiment: None Disclosure: Held
