A decision to proceed with development of the Rambler Tailings project near Baie Verte, Nfld., should infuse considerable cash into the coffers of NovaGold Resources (VSE).
The company acquired the property in 1993 and subsequently optioned it to Raymo Processing (VSE) in return for a 3% net smelter return royalty. Raymo then carried out metallurgical tests and evaluated several options for recovering gold in tailings, including NovaGold’s indoor vat leaching (IVL) process. Recoveries of 85% were obtained from the IVL method and Raymo was granted a licence to use the technology for $50,000 and an additional 1% net smelter return royalty.
Raymo believes the technology will enable it to process 1.1 million tonnes of ore grading 1.4 grams gold per tonne. The company has entered into a joint venture with Electra Mining Consolidated (VSE) to fund the $1.8-million construction costs for the IVL facility.
Based on a gold price of US$375 per oz., Raymo expects revenue to exceed $21 million for the life of the project. NovaGold’s total royalty should therefore exceed $850,000.
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