Montreal-based
The application includes a feasibility study that envisages the mining and milling of at least 1 million oz. gold over 12 years at a capital cost of US$50-60 million.
With resources at Crucitas estimated at 21.7 million tonnes grading 1.58 grams gold and 3.14 grams silver, the average annual output during the first four years is expected to exceed 100,000 oz. gold at a production cost of less than US$160 per oz.
The study is based on a gold price of US$325 per oz., though it suggests production would be feasible at prices ranging from US$225 to US$350 per oz.
The feasibility study was co-ordinated by
Lyon Lake says it is still in discussions with other mining companies regarding joint development of the Crucitas project. TD Securities is acting as Lyon Lake’s advisor.
In November, Lyon Lake suspended previously announced financing discussions for development of a mine and mill at Crucitas. However, in order to meet its short-term needs, Lyon Lake signed a preliminary financing agreement with a Quebec Stock Savings Plan fund for a minimum of $500,000. The issue price will be determined upon closing.
In another development, Lyon Lake has sold its interest in the Cibaliung gold-silver project in Indonesia for US$200,000. The project was a leftover from last year’s merger with Palmer Resources, which is now a wholly owned subsidiary of Lyon Lake.
For the nine months ended Sept. 30, Lyon Lake posted a net loss of $2.1 million (5 per share) on interest revenue of $49,137, compared with a loss of $426,795 (1 per share) on revenue of $10,145 during the corresponding period of 1998.
By Sept. 30, Lyon Lake’s cash-and-equivalents position had dwindled to just $59,048, though the company had paid off its long-term debt.
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