Sumitomo Metal Mining Co. Ltd. (TYO:5713), a major Japanese non-ferrous metal miner, said Tuesday it has discovered a gold deposit containing about 40 metric tons of gold at its Pogo mine in Alaska.
Based on current market prices, 40 metric tons of gold equals ¥188 billion ($2.27 billion), which is worth about 23 percent of the company's projected revenue for the current fiscal year ending this month, according to Sumitomo Metal Mining.
The new ore deposit -- named the East Deep deposit -- was found during a recent test drilling and is located northeast of the main Liese deposit. This finding has raised the total resources and reserves at the U.S. mine to 12.33 million metric tons with an average gold grade of 13.12 grams per ton and a gold content of 155 metric tons.
The Pogo mine is owned 85 percent by Sumitomo Metal Mining and 15 percent by its partner Sumitomo Corp. (TYO:8053).
Sumitomo Metal Mining said a drilling program will continue in 2012 to explore the extension of the East Deep deposit as it holds the potential for further additional ore.
The company also plans to continue the current level of annual production of 10 to 11 metric tons. In 2011, the Pogo mine produced 10.1 tons of gold.
The news prompted the shares of Sumitomo Metal Mining Co., Ltd. (TYO:5713) to soar 5.85 percent to ¥1,231 ($14.87) a share at closing in trading on the Tokyo Stock Exchange.
Sumitomo Corp. (TYO:8053) shares gained 2.24 percent to ¥1,280.
Gold for April delivery was up 0.06 percent, to $1,686.60 an ounce in Tuesday morning trading.