Northumberland sparks revival of gold mining in Maritimes

The revival of gold mining in Nova Scotia is gaining momentum, with a big assist from Northumberland Mines, a junior company with a TSE listing that has been hard at work in that province since 1980.

Headed by gold-oriented geologist William L. Young, Northumberland has two gold projects now at an advanced stage of development in the Maritimes, with a production start likely for early 1988.

“Things are turning around in Nova Scotia. It’s a whole new ball game, with exploration money now flowing in,” Dr Young tells The Northern Miner. “We are looking at a sedimentary situation there not previously recognized — large tonnages of low grade open pit material rather than the small saddle reef (quartz vein) deposits mined by the oldtimers,” he says.

In New Brunswick, Northumberland has exercised its option with Kennco Explorations (Canada) on the Murray Brook gold-silver property following receipt of a positive feasibility study from Kilborn Ltd., consulting engineers. This forsees a 5-year mining operation at a rate of 1,000 tons per day of gossan grading 0.0371 oz gold and 1.49 oz silver.

Open pit mining with a simple vat leach process will keep capital costs to an estimated $9.37 million and operating costs to $9.37 per ton. This evaluation shows that with gold at $414(US) per oz the discounted cash flow rate of return is 49.5%, the payout period is 1.75 years and a net cash flow of $9.5 million.

Negotiations for production financing are currently in progress, Dr Young says. Plant construction could start in the spring.

At the company’s 70%-owned Cochrane Hill project in Nova Scotia, unwatering of the old shaft and underground workings under option to Inco Ltd. will begin shortly.

To finance this project Northumberland has entered into agreements with two funds to incur flow- through 1986 Canadian exploration expenditures which could see Inco- Northumberland spending up to $2 million there this year.

In addition to the underground work, deep drilling will be carried out to increase indicated reserves of 350,000 tons grading 0.36 oz.