Much of Lamaque gold production will come from new zones

More than half of the gold mined from Century Mining‘s (CMM-V) Lamaque underground gold mine near Val d’Or, Que., over its11-years mine life will come from newly discovered ore bodies, the company reported today.

Century says that 62% of gold will come from new ore bodies while the remainder will be mined from remnant ore bodies for a grand total of 1.14 million oz. gold.

Margaret Kent, Century’s president and CEO, says this information wasn’t known two and half years ago when the company first began a computer modeling project of the mine.

“It was believed that the vast majority of recoverable gold ounces in the Lamaque underground mine would come from remnant zones that had previously been mined,” Kent said in a statement.

Since a technical report last April, Century has added additional 428,000 oz. gold resources in the measured and indicated category when it added information from 1,100 diamond drill holes.

The company says it was prompted to release this information after being asked by investors and analysts at the Prospectors and Developers Association of Canada convention earlier this week about the breakdown of gold coming from new and remnant zones.

The mine has proven and probable reserves of 7.7 million tonnes grading 4.56 grams gold per tonne for 1.13 million oz. gold.

Century put the mine on care and maintenance in July 2008 because it didn’t have the funds to properly expand the operation as it wanted.

However, the mine produced 9.4 million oz. of gold grading 5.2 grams gold per tonne over 80 years.

In February, the company raised about US$66 million from institutional investors by selling a structured gold-based financing, which it will repay over a period of five years with physical gold from production at the Lamaque underground mine.

Century said it would use 74% of that to finance project development, 19% for paying down short and long-term liabilities and working capital, and 7% for the costs associated with closing the transaction.