As production approaches at the Keystone gold project’s Farley Lake pit, 50%-owner Black Hawk Mining (TSE) has arranged financing for its share of the development cost.
Black Hawk, which shares the project with Granduc Mining (TSE), will have a loan for up to $2.5 million, which will be repaid out of cash flow from the project. The current capital cost of developing the mine and making changes to the Keystone mill is estimated at $4.7 million.
The Farley Lake pit, 37 km east of Lynn Lake, Man., is expected to produce 48,000 oz. gold per year, and reserves stand at 1.6 million tonnes grading 3.5 grams gold per tonne. The currently operating Burnt Timber pit has a lower grade, 2.7 grams, making it necessary to make some changes to the mill circuit.
Stripping started at Farley Lake in October — ahead of schedule, so that the higher-grade pit could be exploited early. The companies are optimistic about the potential for blocking out additional reserves at the Farley pit.
Black Hawk has also arranged for a US$2-million loan from U.S. metal trader Gerald Metals, to finance further exploration work on the Bald Mountain gold-copper project in Maine and the Vogel gold property in Hoyle Twp., near Timmins, Ont. This can be converted to a gold loan at any time.
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