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Why This Gold Stock is Up 171% Year-to-date

Jocelyn Aspa Jocelyn Aspa, The Market Herald
1 Comment| June 18, 2021

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Click to enlargeAlthough Ontario is Canada’s largest producer of gold, out west in British Columbia, the province is fourth only behind Quebec and Nunavut.

British Columbia also hosts the infamous Golden Triangle, situated in the northern region of the province close to the Yukon; however, BC also holds a wide range of gold deposits all throughout and has over 3,380 occurrences in which gold is considered as the primary commodity, according to the Ministry of Energy, Mines and Petroleum Resources of British Columbia.

Meet Gold Mountain Mining Corp. (TSXV:GMTN, OTCQB:GMTNF, Forum), a gold and silver exploration and development company focused on resource expansion at its Elk Gold Project. Located 57 kilometres from Merritt in the south-central region of the province, the Elk Gold Project spans over 16,000 hectares.

Gold Mountain Mining owns a 100 per cent interest in the Elk Gold Property which is also a past-producing High-Grade Gold Mine. The property is made up of 127,069 metres of historic drilling, extensive geochem and geophysics programs.

As it currently stands, the company has a clear path to near-term production and has recently completed a Phase 1 drilling program at the Elk Gold Project and anticipates ramping up production at the property to 65,000 ounces by 2025.

Gold Mountain has established strategic partnerships with it’s mining contractors and ore purchase partners to establish cost certainty in its economic model.

Following the announcement of the NI 43-101, Stockhouse Editorial had the opportunity to catch up with Kevin Smith, CEO of Gold Mountain Mining, to discuss the project, some recent milestones and what investors can anticipate moving forward.

SH: Thanks for joining us today. First, can you give us a brief overview of the Elk Gold Property. Also, small scale mining can be fraught with cost overruns and just wondering what your plan is to keep Gold Mountain’s production plan on budget?

KS: The Elk Gold Property is located next to an all-seasoned highway connecting Merritt and Kelowna, in south central British Columbia. This close proximity to two cities, gives us access to strong labor communities and has allowed us to partner with one of the top mining operators in BC, Nhwelmen-Lake LP. They’ll be mining and hauling our ore at a fixed cost per tonne to our Ore purchase partners New Gold Inc. where we have a predefined metals payable split.

SH: In terms of the updated PEA at the property, what are some of the key takeaways from the report investors should be aware of?

KS: The success of Phase 1, and the increase in ounces to our Resource, resulted in a bump of 20% to our after tax NPV5 which now sits at $231M for the project. Additionally, our updated model now reflects an AISC of $554/oz, representing a 25% reduction in our operating costs.

SH: Now that Phase 1 drilling is complete, the company has begun a Phase 2 exploration program at the Elk Gold Project. What is the company targeting in this exploration program and when do you anticipate having results?

KS: After intercepting grades reaching as high as 124g/t in Phase 1, our drill program will continue chasing the Elk’s deep, high-grade ore at our established mineral resource while continuing to step out along strike. We were able to add 258,000 ounces on Phase 1 using this strategy which we’ll continue to replicate in Phase 2. We’re also planning to drill 5 holes in our Elusive Zone, which we think is going to be a more bulk tonnage style target, similar to Kodiak MPD which is around 4km to the South West of our property.

SH: To date, are there any other milestones on the Elk Gold Project the company has achieved that investors might want to know about?

KS: Executing on aggressive timelines and milestones is something we believe sets us apart. We’ve established a number of partnerships to leverage industry renowned expertise to drive the projects exploration (HEG Exploration), operations (Nhwelmen Lake LP) and expansion (JDS Energy and Mines) objectives. We’re also working closely with provincial regulators to ensure our permit process continues to go smoothly and land as expected, by the end of June ‘21.

SH: What milestones does Gold Mountain Mining have in the pipeline we should be watching for?

KS: The mining permit amendment will be our largest milestone to date and is the final piece of the puzzle to get the Elk back into production. We also have our Phase 2 drill program underway and with 10,000 meters planned, there should be an abundance of assay updates between now and the end of August. With construction already started, waste rock mining slated for July and August, Ore mining in September, and ore delivery in October, this summer will be a busy one. Should our timelines hold together, which we feel very confident in, Gold Mountain will receive our first cash proceeds from mining in November of this year. Given all this news flow, there should be no shortage of exciting developments in the second half of 2021.

SH: Gold has certainly had a bullish year. What are your thoughts on current gold market conditions and what do you expect to see moving into the rest of the year?

KS: The gold market has been an interesting rollercoaster since taking on the property in May, 2019. At the time of acquiring the Elk Gold project, gold was at around $1250 and everyone thought we were crazy for getting into a gold deal. Even back at those prices, the project had really strong economic potential and only needed a modest amount of capital to get it back into production. The first half of 2020 was an incredible run for gold, but there was a strong consolidation from August until March of this year. Since that double bottom in mid March, gold has caught a tailwind and is looking strong. Given the amount of quantitative easing from central banks and loose monetary policy, we foresee economic conditions that will continue driving the price of gold beyond it’s all-time highs in the second half of 2021. The goal for the Gold Mountain team has always been to rapidly get into production, capture these Gold prices to increase our mining income and continue expanding this company in a non-dilutive manner. We feel like the set up in the second half of the year is about as good as we could have asked for.

SH: Is there anything else you’d like to touch base on that I might have missed?

KS: No I think that was a really good Q&A period on the company. I would encourage your subscribers to check out our social media and website to see some of our video updates that we have provided as we progress through developing the project. This is something unique that I think gives a good look into our company and how we have been executing on our business plan. Given how much news flow we have in the pipeline, it will also set the tone for what shareholders can expect from us as we continue to build BC’s next high grade gold producing mine.

FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing


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