TORONTO (miningweekly.com) – After the February closure of a friendly merger between Eagle Mountain Gold Corp and GoldSource Mines, GoldSource president and director Ioannis Tsitos told Mining Weekly Online that it was like two pieces of a puzzle coming together to rapidly advance the Eagle Mountain gold project, in Guyana, to first production – slated for the end of the year.
Tsitos said that the company was now following an aggressive track to develop the first phase of the low-cost deposit, which would in time provide cash flow with which to expand the operation.
“We have managed to protect the project during this difficult time for the junior sector. While we needed capital to construct the Eagle Mountain project, several interested parties that wanted to partner with us approached us. Among those were the management of Mexico-focused miner SilverCrest Mines, who were also involved with GoldSource.
“Because of the fact that they already had experience to start a new operation, they were a perfect match for us. After undertaking our own diligence, it was impossible for us to say no,” Tsitos said.
Indeed so, owing to 99.8% of Eagle Mountain’s shareholders voting in favour of the merger.
Tsitos pointed out that the combined entity, continuing under the name of GoldSource, was now expecting approval of the mining permit for the 1 000 t/d first phase of the project within the next two months.
He explained that the owing to the first phase not using cyanide to leach ores, there were no environmental permitting requirements to adhere to, apart from submitting a completed environmental baseline study.
Tsitos said that the company now needed about $5-million to $6-million to construct the first phase of the operation, whereafter it would reinvest capital back in to expanding the operation to about 5 000 t/d by the third phase.
Under terms of the merger agreement, GoldSource had to, among other things, complete a $1.5-million financing. In the event, GoldSource managed to realise $2.4-million in an oversubscribed financing, lifting Tsitos’ confidence that a second financing around June would attract the necessary financial support to fund the project through to production.
The Eagle Mountain project has an existing National Instrument 43-101-compliant resource of 188 000 oz of gold in the indicated category, and 792 000 oz in the inferred category, located on 250 ha of the 5 050 ha prospecting licence.
The property is believed to hold “excellent” exploration upside and was near to initial infrastructure for development.
An estimated 40% of the gold resource is considered mineralised saprolite, which would be the initial focus of development, with the remaining 60% considered to be fresh rock. The saprolite and fresh rock both remain open in three lateral directions and to depth, showing strong mineralisation along defined edges.
Outcropping mineralised saprolite is potentially suitable for initial low-cost, low-strip ratio openpit mining and gravity processing, for which the flow charts were currently being finalised.
Tsitos said that the company was targeting an all-in cost of between $500/oz and $600/oz, ranking the project among the lowest-cost gold producers in the world. In its first phase, the project would produce about 10 000 oz/y of gold, ramping up to a hypothetical maximum output range of 70 000 oz/y to 90 000 oz/y when fully developed.
Goldsource is also engaged in exploring and developing a new coal field in Saskatchewan. It had aggressively drilled only a portion of this new thermal coal field and had discovered 17 coal deposits of various sizes with coal zone thicknesses up to 126 m within the permit area of the Border coal project.
This project has a compliant indicated resource of 117-million tonnes of coal and an inferred resource of 33-million tonnes of coal.
The company’s TSX-V-listed stock had risen some 76.92% since the start of the year, and on Tuesday changed hands at C$0.23 apiece.
Edited by: Creamer Media Reporter