Eldorado Gold to restart White Mountain mine

A dispute over alleged water contamination that shut down Eldorado Gold‘s (ELD-T) White Mountain mine in northeastern China for five months has been resolved and the company says it expects to ramp-up to full production quickly.

A group of local farmers forced the Vancouver-based company to shut down the mine in August until water issues were resolved. The operation, about 230 km southeast of Changchun, the capital of Jilin province,  “is now able to discharge treated water under an approved change to the Environmental Impact Assessment,” the company said in a statement.

During the five-month shutdown, development work on the underground access to the mine continued.

Eldorado owns a 95% interest in White Mountain, with the remainder held by its local joint-venture partner, the Jilin Tonghua Institute of Geology and Minerals Exploration and Development.

White Mountain was built during 2008 for about US$65 million. The underground mine utilizes a sub-level open stoping method for portions of the ore body that are thicker than 10 metres and steeper than 55 degrees, a benching method for thicker portions and a cut-and-fill method for the remainder of the deposit.

Eldorado acquired White Mountain from Sino Gold in December 2009 and commercial production began in January 2009.

In the first nine months of last year, the mine produced 25,751 oz. gold at a cash operating cost of US$478 per oz.

At full capacity the mine is expected to produce an average of 65,000 oz. gold annually.

The White Mountain processing plant is a standard Chinese design carbon-in-leach plant.

A major north-east trending regional fault zone hosts the deposit, with mineralization extending along a known strike length of about 1.5 km.

Metallurgical testing has identified two metallurgical ore types, refractory and non-refractory. Recoveries are nominally 85% for the non-refractory ore and 65% for the refractory ore. The production schedule is based on roughly 10% of the ore being refractory.

Sino Gold discovered the deposit in 2004 and the area is also known for its coal and iron ore mining.

In addition to China, Eldorado has properties in Brazil, Greece and Turkey.

At presstime Eldorado was trading at $15.47 per share. Over the last year it has traded in a range of $8.13-$15.89 per share and has 536.9 million shares outstanding.