With environmental work largely complete, CMP Resources (ME) expects the British Columbia government will soon approve development of the QR gold deposit, 70 km southeast of Quesnel, B.C.
CMP bought the property from Rea Gold last year for $450,000 plus the transfer of 2.5 million shares of Rea owned by CMP.
Near-surface preliminary reserves in three separate zones are estimated to be 1.33 million tonnes grading 4.7 grams gold per tonne.
Plans call for two years of open-pit mining of the Main zone followed by bulk-tonnage underground extraction on the Midwest and West zones. The capital cost of bringing QR on-stream is estimated to be $14 million (based on firm bids from contractors on 90% of the total). The additional cost for development of the two underground deposits is estimated at $3 million.
Output is projected at 1.2 million grams (40,000 oz.) of gold per year at a cash operating cost of about US$225 per oz.
CMP has about $5 million in cash, no debt, and various resource company investments. Nevertheless, it does not plan to pursue financing until after a proposed combination of Plexus Resources (TSE) and an Ontario numbered company is wrapped up. The private company is owned by Placer Dome (TSE) and Dundee Capital (TSE).
On May 18, shareholders of Plexus and CMP are to vote on the proposed merger. Financial adviser Goepel Shields & Partners is determining share ratios.
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