Columbus Gold drops on new Montagne d'Or resource estimate

Columbus Gold (CVE:CGT) shares fell Monday after the company released a revised resource estimate for its Montagne d'Or gold deposit in French Guiana.

The news disappointed investors, who dumped the Vancouver-based junior's stock.

Shares in the company finished the day at 48 cents, down about 8%, after plunging to a low of 45 cents in heavy volumes during late afternoon trading.

Columbus Gold commissioned the update for the deposit after saying in May that it suspected the initial resource estimate was materially overstated in terms of both grade and contained ounces.

The company said at the time that the initial estimate, compiled by Coffey Mining in 2012, was found to contain "issues with respect to certain estimation methods" related to the inferred gold resource.

The initial report used a cut-off grade of 0.3 grams per tonne yielding a total 5.37 million ounces of gold.

The revised estimate, also prepared by Coffey Mining, shows a smaller inferred gold resource of 4.31 million inferred ounces of gold at a cut-off grade of 0.4 grams per tonne.