Coin Lake gets green light at Golden Reward operation

Toronto-based Coin Lake Gold Mines (TSE) has received permission to go ahead with gold production at the Golden Reward property in South Dakota. The company said it has received the necessary state mining licence and with full-scale construction under way, production is sheduled to begin at a rate of 65,000 oz gold and 50,000 oz silver annually in six months. Coin Lake Gold has a 33 1/3% interest in the Golden Reward Mining Co., a U.S. joint venture which is conducting the exploration, development and production at the South Dakota’s Black Hills gold camp.

After obtaining the environmental permits, the Golden Reward joint venture is spending $19.6 million (US) on the first stage of development which includes an open pit mine, and a heap leach mining facility.

Clearing has started in preparation for installation of a heap leach pad.

“Full-scale development can proceed expeditiously to an early production start as a result of extensive preparatory work,” said Chairman Thomas Skimming.

Exploration so far, has established a proven and probable ore reserve base of 18.8 million tons containing 824,000 oz gold and 3,775,000 oz silver at a cutoff grade of 0.0175 oz.

At a cash cost of $165 per oz, production is expected to begin at a rate of two million tons per year with an overall stripping ratio of 2.28:1, Skimming said. Metallurgical testing has indicated a 70% recovery rate.

Coin Lake is also negotiating to increase its interest in the project to 66 2/3% by merging with partner Moruya Gold Mines of Australia.