Oct. 10 (Bloomberg) -- Keegan Resources Inc., a Canadian metals exploration company, rose the most in three years after increasing its estimate for the amount of gold at the Esaase project in Ghana.
Keegan soared 18 percent to C$3.58 at the close in Toronto after earlier gaining 21 percent, the most intraday since Jan. 23, 2009.
Esaase has a so-called measured and indicated gold resource of 3.83 million ounces with an average ore grade of 1.73 grams a ton, the company said today in a statement. That compares with a September 2011 estimate of 3.64 million ounces at a grade of 1.1 grams a ton.
The revision to the ore grade is “very significant -- a massive increase,” Nicholas Campbell, a Vancouver-based analyst at Canaccord Genuity Corp. who has a “speculative buy” recommendation on the shares, said by telephone.
The estimates increased because Keegan decided to “selectively mine” the deposit, the company said. Keegan will announce an updated mine plan in about a month, John Eren, the company’s Vancouver-based manager of investor relations, said today by telephone.
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