Abcourt plans low-cost, rapid rousing of Sleeping Giant gold mine in Quebec

Abcourt Mines (TSXV: ABI) says it can revive the Sleeping Giant gold mine in Quebec after about $40 million in capital costs, pleasing analysts.  

The former underground mine in the Abitibi region 80 km north of Amos could produce 30,000 oz. a year at a cash cost of US$1,009 per oz. over a mine life of 5.8 years, according to a preliminary economic assessment released on Wednesday. The site’s mill would operate at half its 700-tonne a day capacity, it said.  

Initial capital costs to restart the mine are $42 million and would take 18 months to complete, according to the report. Sustaining capital costs would be $31.8 million. 

“It demonstrates the Sleeping Giant mine could be brought back into production with minimal capital investment,” Red Cloud Securities wrote in a note on Thursday. “Resource growth and a 100% mill utilization rate could enhance the economics and scale of the operation.”  

Abcourt could increase the resource by expansion drilling near the former mine and on the property, Red Cloud said. The mill could increase productivity by accepting ore from nearby projects as it did from 2016 to 2022, the analyst said.  

“This project could quickly become the next gold producer in Quebec,” Abcourt president and CEO Pascal Hamelin said on the company’s website. “The next step is to now target promising areas to convert inferred to indicated resources for incorporation into a more detailed economic assessment.”  

Sleeping Giant has more than 800 mineralized structures remaining open at depth, down plunge and to the east of the mine, Abcourt said.  

North American Palladium shut Sleeping Giant in 2012 after producing 37,328 oz. gold from 2009. That company indicated “although the gold zones extend at depth, the structures mined to date are discontinuous, significantly reducing the tonnage that could be profitably mined,” Abcourt said in a technical report released in December.  

Next owner Maudore Minerals produced 6,100 oz. gold from the mine before going bankrupt in 2014. Abcourt bought the 64.8-sq.-km Sleeping Giant for $2.55 million in 2016, according to Costmine Intelligence, part of The Northern Miner Group. 

Sleeping giant produced 965,100 oz. gold from 1993 to 2008, when Iamgold (TSX: IMG; NYSE: IAG) put it on care and maintenance.. The mine produced almost 97,000 oz. gold from 1988 to 1991 for Aurizon Mines.  

Under Abcourt’s plans, the remaining half of Sleeping Giant’s mill capacity could be fed in the medium term with ore from the Discovery and Flordin deposits, Hamelin said. The mill is about 200 km away by road.  

The project has a net present value of $54.4 million at a 5% discount rate for an internal rate of return of 33%, the study shows. It envisions processing 720,200 tonnes grading 8.1 grams gold per tonne for 181,300 oz. gold. All-in sustaining costs are pegged at US$1,120 per ounce. 

Cyrus Capital Partners, a unit of Luxembourg-based FBC Holdings, holds a $5 per tonne royalty on the first 350,000 tonnes extracted from the Sleeping Giant mine. Last year, Maverix Metals, now Triple Flag Precious Metals (TSX: TFPM), paid $2 million for a 2% net smelter return royalty on Sleeping Giant and the 62.9-sq.-km Dormex property just south of it.