Directors of Wilanour Resources (TSE) have elected to hire an independent consultant to determine whether the old Cochenour gold mine near Red Lake, Ont., should be brought back into production.
Unhappy with TVX Gold’s (TSE) conclusion that it would “not be prudent” to develop the former high-grade producer under current market conditions, Wilanour is seeking a second opinion, says Wilanour President Terry Podolsky.
The decision was taken at a Wilanour board meeting June 24, after project operator TVX decided to postpone a feasibility study rather than spend $300,000 to obtain capital cost estimates and metallurgical test results from an outside consultant.
“We will get a group of consulting geologists and miners to give us some recommendations as to what should be done,” said Podolsky who expects to be able to announce their conclusions in September.
While admitting that few gold mines are being developed given the slump in the gold market, Podolsky said the Cochenour property is in an old mining camp (near the producing Campbell and Dickenson mines) and there is already infrastructure in place. “Surely this is different from a green fields project,” he said.
Neither Podolsky nor TVX Exploration Vice-President David Browne were prepared to estimate what it would cost to bring the former high-grade gold mine back into production.
Having spent about $9 million so far, the Wilanour joint venture consisting of TVX, Wilanour Resources, Pronto Explorations (TSE) and Robert Fasken, has outlined 446,979 tons of probable and possible reserves grading 0.56 oz. per ton based on a cutoff grade of 0.25 oz.
But Browne said the property doesn’t start to look interesting until gold rises to US$400 per oz. from its recent US$363-366 trading range; and as TVX owns 50% of the project, it can’t be developed without TVX’s consent.
The remaining interest is held by Wilanour with 30%, Pronto with 12.5% and Robert Fasken at 7.5%.
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