South-Malartic Exploration (MSU-V) will start production from the Croinor gold property, 70 km east of Val d’Or, Que., this month, following a custom-milling agreement with Richmont Mines (RIC-T).
South-Malartic plans to ship 65,000 tonnes of ore from Croinor to Richmont’s Camflo mill near Val d’Or for processing between July and December. Pit models used in feasibility work predict a grade of 5.47 grams gold per tonne.
The company also engaged a mining contractor, Norascon, of Amos, Que., to perform all the mining and truck the ore to Camflo. Another contractor, Ross-Finlay, has been engaged to drive a decline from the base of the Croinor pit.
Croinor has a measured and indicated resource of 2.5 million tonnes at a grade of 3.46 grams gold per tonne.
In late May South-Malartic consolidated ownership in Croinor in a deal to buy out 30%-partner Huntington Exploration (HEI-V), which is turning itself into a pure oil-and-gas company. The deal brought all of Huntington’s mineral properties into South-Malartic in exchange for 1.5 million shares of South-Malartic and 1.5 million warrants, exercisable at 60 for two years from closing.
That deal requires approval from Huntington shareholders, and is scheduled to close near August 1. The South-Malartic shares are to be issued in 100,000-share blocks in each of the first six months following closing, with 50,000-share blocks released monthly until all have been issued.
South-Malartic gets the Croinor land package, Huntington’s Tex-Sol property near Val d’Or, where Cambior (CBJ-T) is to spend $350,000 over three years. Also in the deal are properties in Ontario, Quebec, Nova Scotia, and the Northwest Territories; the most advanced is an exploration-stage base metal property in the Sturgeon Lake region of northwestern Ontario, where Inmet Mining (IMN-T) holds a 67% interest.
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