Galway Metals (TSXV: GWM; US-OTC: GAYMF) has more than doubled the indicated tonnes at its Clarence Stream project resource in New Brunswick, but increased gold ounces fell short of an analyst forecast. The shares fell.
The update outlines 27.2 million indicated tonnes grading 1.62 grams gold per tonne for 1.42 million oz. contained gold and 19,500 tonnes of antimony, the company said Monday. That compares with 12.4 million indicated tonnes at 2.31 grams gold for 922,000 oz. gold and 9,600 tonnes antimony in a 2022 resource.
The project 70 km south of Fredericton also hosts 28.5 million inferred tonnes at 1.4 grams gold for 1.29 million oz. gold and 3,100 tonnes of antimony. Four years ago, the inferred category was 16 million tonnes grading 2.4 grams gold for 1.33 million oz. gold and 2,100 tonnes antimony.
Last month, Red Cloud Securities forecast the overall new resource could approach 3 million oz. gold, versus the 2.7 million oz. reported Monday. Analyst Ron Stewart had also expected indicated ounces to account for about 60% of the total resource, compared with 54% in the update.
Shares in Galway Metals fell 20% to 41.5¢ apiece in Toronto at mid-Monday, their lowest level in 11 months, valuing the company at $56.4 million.
Higher confidence
Galway has almost doubled the overall tonnage while converting a substantial amount of gold into the higher-confidence indicated category. The shift towards the higher-confidence indicated category could support future engineering studies. Galway said it is considering the timing of a preliminary economic assessment.
“Approximately half of our contained indicated gold ounces occur at grades above 3 grams gold per tonne, underscoring the quality of the updated resource and its potential to support future development,” Galway President and CEO Robert Hinchcliffe said in the company’s release.
“Most importantly, the North, South and Southwest Deposits remain open for expansion through ongoing drilling, while our broader 65-km Clarence Stream district continues to provide significant discovery potential.”
Galway didn’t immediately reply to an email on Monday seeking further comment.
While total gold ounces increased about 20%, the company reported lower average grades because it’s outlining a larger open-pit resource.
The updated estimate incorporates results from 342 drill holes totalling almost 70,000 metres completed since the 2022 resource, along with revised geological modelling, metallurgy and pit optimizations. The indicated resource now accounts for more than half of the project’s total contained gold.
Galway said about 96% of the contained gold ounces are constrained within optimized open pits across the North, South and Southwest deposits. While the updated resource is largely envisioned as an open-pit operation, the South and Southwest deposits also offer potential for future underground expansion.
Antimony
The update also expands Clarence Stream’s antimony inventory at a time when Western governments are seeking new supplies of the critical mineral, which is used in defence applications, semiconductors and flame retardants.
China imposed export controls on antimony in 2024 as part of a broader tightening of shipments of strategic minerals including gallium, germanium and graphite, prompting Western governments to seek alternative supplies.
Clarence Stream’s growing antimony inventory adds a strategic dimension, although gold remains the primary commodity and the project has become one of Atlantic Canada’s largest undeveloped deposits of the yellow metal.
Exploration
The company is continuing exploration while advancing engineering studies to support the project’s next stage of development.
Galway has four drill rigs turning at Clarence Stream as part of a 40,000-metre program this year. Two are focused on expanding and upgrading resources at the North, South and Southwest deposits, while the other two are testing regional and near-mine targets across the broader district.
Galway also owns the Estrades polymetallic project in Quebec, where a preliminary economic assessment released in January outlined a 10.4-year underground copper-zinc-gold-silver mine requiring C$117 million in initial capital.
The project has an after-tax net present value of C$212 million at a 5% discount rate and a 33% internal rate of return using long-term metal prices, according to the study.
