Formal Production Decision for Samatosum

With all government approvals in hand, the board of Minnova Inc. (TSE) recently made a formal decision to bring the Samatosum project near Adams Lake, B.C. into production. The company has a 70% interest and is operator of the high grade silver project, while partner Rea Gold Corp. (TSE) holds a 30% working interest and a 5% net smelter royalty.

Minnova’s board also ratified the recommendation by project management to proceed with the completion of all construction work necessary to begin full production as soon as possible. On-site work began in early October, shortly after the company received approval from the British Columbia government.

The mill will have a nominal daily capacity of 500 tons but will be able to handle peak loads up to 550 tons per day. Total capital and indirect costs, including a 10% contingency, are estimated to be $32.2 million which includes $7.8 million in development and operating costs. Rea Gold’s share of costs necessary to maintain its working interests are $9.7 million.

The Samatosum deposit, which has a mineral inventory (undiluted) of 661,000 tons grading 32.10 oz silver, 0.052 oz gold per ton, 1.2% copper, 3.5% zinc and 1.7% lead, will be mined by a combination of open pit and underground metho ds.