BlackRock ups Dalradian stake in major show of faith

VANCOUVER (miningweekly.com) – The world’s largest asset manager BlackRock has increased its ownership in TSX- and Aim-listed Dalradian Resources to 11.3%, reflecting the firm’s strong conviction that Dalradian’s high-grade Curraghinalt gold project, located in Northern Ireland, will be a financial success.

In a regulatory filing on Friday, BlackRock revealed that its holdings had increased to 29.97-million common shares.

A December feasibility study has calculated an after-tax net present value, at a 5% discount rate, of $301-million, and an internal rate of return of 24.4% at an assumed gold price of $1 250/oz.

The feasibility study is based on Curraghinalt’s proven and probable reserves of 1.44-million ounces of gold and 660 000 oz of silver, held in 5.24-million tonnes grading 8.54 g/t gold and 3.9 g/t silver. Measured and indicated resources stand at 2.1-million ounces gold contained in 5.61-million tonnes grading 11.61 g/t gold.

Importantly, the feasibility assessment excluded the significant inferred resource of 2.31-million ounces gold, contained in a further 7.13-million tonnes grading 10.06 g/t gold.

Over the initial ten-and-a-half years life-of-mine (LoM), Dalradian expects to produce 1.36-million ounces of gold and 380 000 oz silver, using an average overall gold recovery of 94.3%.

The operation will produce gold at a rate of 130 000 oz/y in the first ten years, with an average LoM total cash cost of $556/oz and a LoM all-in sustaining cash cost of $674/oz.

The company also announced on Wednesday that it had completed the Minco acquisition, which gives the project development company control of the 2% net smelter royalty on its Curraghinalt gold deposit.

The company and its project is one to watch as its high grades reflect a premium asset in a quality-project-scarce market. Some analysts have suggested the company could be snatched up in a similar fashion to Goldcorp's acquisition of Kaminak Gold, which it took for C$520-million early last year.

Dalradian’s TSX-listed stock has gained 40% since the start of the year, to change hands at C$1.64 apiece on Wednesday.