Spanish Mountain Gold had its project descriptionSpanish Mountain Gold had its project description for its flagship Spanish Mountain Gold project accepted by both the British Columbia Environmental Assessment Office (provincial) and Canadian Environmental Assessment Agency (federal). This is an important milestone as it marks the official start of the permitting process for building a mine even though SPA has clearly been doing a lot of work leading up to this.
This acceptance by both the federal and provincial agencies will be followed by public meetings with the nearby communities to discuss the project in detail. Not that the details should come as any surprise to these communities as SPA has apparently been well ahead of the curve in ensuring complete disclosure within both the local communities and the two First Nation Bands in the project area. These discussions have already proved successful with signing of a Memorandum of Understanding with the Williams Lake Indian Band earlier this year.
In its news release, SPA also provided the timing for its much anticipated pre-feasibility study, which is expected to be formally commissioned in September 2011. Following the Preliminary Economic Assessment (PEA) completed late last year, this is the next major engineering study in a normal project development cycle. This pre-feasibility study is expected to build on an already very detailed PEA and it is anticipated that it will explore the possibility of a smaller 25,000 tonnes per day (tpd) mill for the first 3 years of the operation with further expansion to 40,000 tpd thereafter. This reduced mill throughput does not seem to significantly impact the annual gold production projected in the PEA due to the mining of higher grade material from potential starter pits. At the same time, it seems to positively impact project economics in terms of lower initial capital expenditure and a quicker capital payback. If this scenario is proved out in the study, it could be a “lower risk/ higher profit” option than that outlined in the PEA.
All in all, these are steps in the right direction for SPA and can further de-risk the project in the eyes of an investor. With the necessary funding for the project assessment work in place, Brian Groves, SPA’s CEO, is set to take the Spanish Mountain gold project all the way to construction decision next year.
Resource Clips article on SPA