After experiencing frustration in its attempts to obtain permits and financial backing, Wheaton River Minerals (WRM-T) has secured financing for its Golden Bear heap-leach project in northwestern British Columbia.
The company, which controls the project through an 84% interest in property owner North American Metals, has signed an agreement with BZW Mining & Metals (a division of Barclays Bank of London) to arrange for US$11 million in financing.
The deal is expected to close at the end of April, subject to an independent technical review and regulatory approvals.
Wheaton had to cancel plans to reopen the mine in early 1996 as a result of its inability to obtain the necessary permits. It has since obtained those permits, as well as an updated feasibility study.
However, although the financial review process is well under way, Wheaton President Ian McDonald says he is concerned about the price of gold and its effect on the project.
“Until the credit committee approves the financing, we are not allowed to put any forward hedging in place,” he says. “So every time the gold price drops, our bottom line is affected.”
The feasibility study is based on a gold price of US$385 per oz. — at presstime, the yellow metal was trading at US$351 per oz. on the London fix — and indicates a mine life of six years at production costs of US$232 per oz.
The study envisages gold production of 214,000 oz. at a recovery rate of 85%, from 1.5 million tonnes grading 5.1 grams gold. Reserves are divided into three zones: Kodiak A at 824,000 tonnes grading 3.3 grams gold per tonne; Ursa at 511,000 tonnes grading 7 grams; and Kodiak B at 278,112 tonnes grading 8.6 grams. Kodiak A and Ursa are amenable to open-pit mining at stripping ratios of 1-to-1 and 6.6-to-1, respectively; Kodiak B will be mined by underground, bulk-mining methods. Wheaton plans to hire a mining contractor in the next two months, with startup scheduled for May.
By the end of the year, the mine is expected to produce 25,000 oz. gold, with annual output steadily increasing to a peak of 51,000 oz. by 2000.
In addition to the three deposits, the Golden Bear project contains the Grizzly and Kodiak C deposits and a low-grade stockpile on surface. The stockpile contains reserves of 2.5 million tonnes grading 1.3 grams gold, while the deposits host 152,945 tonnes grading 20.5 grams and 276,000 tonnes of 7.8 grams, respectively. These mill feed sources would provide an additional 277,000 oz. if brought into production.
The company anticipates it will receive a commitment letter from the bank by the end of February.
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