Local newspaper updateBTW which "royalty dispute'?
St Andrew committed to Holt-Holloway operations
Posted By RICK OWEN, NORTHERN NEWS
KIRKLAND LAKE -St Andrew Goldfields Vice President and General Manager Duncan Middlemiss told people at the Northern Prospectors' Association Annual General Meeting that the company is focused and ready to move ahead.
During his address he noted the company went through a land acquisition period from 2003 up until 2007, they have announced a production decision for the Holt-Holloway, they have completed a few financing and improved the balance sheet so they are now basically debt free. As well the company has sold non-core assets and are concentrating on the Porcupine Destor Fault because they believe that is where the company has the greatest potential to succeed.
Middlemiss said the objective of the company is the Holt-Holloway financing. They need about $35 million to get both sides going. The company is working on resolving a royalty dispute, which before the courts and is holding up the project.
The pre-production period at Holt will be about six months. He said they have a few things they want to work on but basically the infrastructure at Holloway and Holt are both in good shape. They plan on some refurbishing of mobile equipment, and refurbishing the assay laboratory, as well as other projects. In the 43-101 report $23 million worth of work is identified to bring the mine 'up to snuff'.
Middlemiss said in month number four of the six-month pre-production period they would be generating ore development and start process ore.
Currently Middlemiss said they have two drills working on the Hislop project, which is directly north of the Ross Mine. In addition to the drilling they are also re-sampling core. St Andrew sees the property as having open pit potential that could provide additional ore feed to the Holt mill, which has the capacity to process 3,000 tonnes of ore per day.
St Andrews has raised about $2.6 million in flow-through money for the Hislop project. Middlemiss thinks the Hislop could develop into a deposit that could contain more than 200,000 ounces of gold and will provide additional mill feed for the Holt mill. By using more of the capacity at the mill it will drop the unit costs of milling.
Middlemiss described their land position in the Holloway area as being prime hunting ground and noted that while lately there has been disheartening news for other medals the gold outlook is good with gold being at about $1,100 Canadian per ounce.
"The St Andrew land position is pretty diverse along the Porcupine Destor probably stretching 90 kilometres... There certainly are a lot of targets along there. The Porcupine Destor Fault is a pretty prolific producer," said Middlemiss.
In terms of resources St Andrew has in measure, indicated an inferred categories have more than 4.5 million ounces.
About one million of that is the Aquarius project, which is a low-grade deposit.
Middlemiss said the Holloway- Holt is fully permitted, the mill is ready to go, they have three shafts, ventilation system, heating system and everything is functional. The Holloway-Holt has 34 million tones at 5.7 grams gold per tonne and bout 80 percent of the reserves are at the Holt- McDermott site. He ere is a lot of potential on both sides to increase the gold resource.
At the Holloway Middlemiss said Newmont put in a drift that goes for about 2.4 kilometres to the Blacktop Zone that is multi-zoned and suitable for bulk sampling. St Andrew discovered that there hasn't been a lot of drilling off the drift and one of the most promising zones is north of the Blacktop and Newmont was looking to the south. What the company would like to do is extend the mine life of Holloway with further exploration.
Currently the technical report calls for 1,500 tonnes a day from both sides of the highway, about 750 tonnes from each.
One of the bottlenecks now is getting the ore from the Blacktop to the shaft. So St Andrew is going to conduct drilling looking for new zones and could eventually end up with a ramp up to surface.
At Holt Zone four a flat lying zone has the bulk of the reserves. Zone Six is steeper zone and the first zone they will start mining is the C 103, which is smaller zone that is already developed.
Middlemiss said costs will be about $600 U. S. an ounce. The project will generate about $110 million over the seven-year mine life but they are quite positive they will be able to extend the mine life. The payback on the project is 2.3 threes based on gold price of $775 an ounce and $0.87 Canadian exchange. Right now Canadian exchange is at about $0.81 and gold is sitting at about $910 or $911 so the economics of the project are much better.
When in production St Andrew will employ 201 people, currently they have 48 working on site. Middlemiss said it is a good time to be hiring people for mining projects.