OTCPK:GWAXF - Post by User
Comment by
imerc23on Jan 22, 2014 9:52pm
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Post# 22123332
RE:What's up witn two mills?
RE:What's up witn two mills?bxju asked "Can someone explain the logistics of the two mills? Is the Glencore Kidd mill deal still in effect? If so, can someone explain the logistics".
The standard business model for a jr mining company is to do a JV with a deep-pocketed partner that will pay hundreds of millions of dollars up front to build a new mine & mill. But as we all know, that model doesn't work very well these days, and even if you find a willing partner, that partner is going to end up owning most of the project. GWA faces the added challenge that its ore is refractory, so the processing is more complicated. GWA's team wants to get into production as quickly and cheaply as possible, so they're thinking outside the box.
So the concept that Greg Romain is exploring is, yes, to have use two mills. Mill #1 will grind the ore and use floatation processes to concentrate the ore up to about 90 g/t. Mill #2 will take this concentrate, roast it in an autoclave, then use cyanide leach processes and extract the gold into dore bars.
Some advantages of this two stage concept are: i) Glencore Xtrata will make its Kidd line available to serve as "Mill #1", and the cost of refurbishing it will be much cheaper than building from scratch; ii) Mill #1 has to be close to the mine site, but after the ore has been concentrated to 90g/t then it's less problematic to transport it to a more distant location for stage 2 of the processing, so GWA has got a wider range of options. In this case, US's site in North Cobalt is > 200 km from Timmins -- it would be too expensive to truck the original ore over such a long distance but this two-stage plan will work; iii) It's not necessary for GWA to own Mill #2 any more than they have to own Mill #1. For a third party that wants to consider building Mill #2, the advantage for that third party is that there's lots of potential feedstock, not just from GWA -- there's other mining companies in northern Ontario that have refractory ore that they're unable to process themselves.