San Gold officially opens Rice Lake gold mine

Vancouver — The official opening of Manitoba’s newest and only gold mine attracted more than 500 guests, including employees and their families, government leaders, shareholders and local supporters. The Royal Canadian Mounted Police also attended as operator San Gold (SGR-V) invited guests to view the pouring of two gold bars from the Rice Lake mine near Bissett, Man.

President Dale Ginn said the turnout exceeded expectations.

“We initially thought maybe a hundred people might turn up, but we were pleasantly surprised and pleased that it was a great success.”

The Rice Lake mine isn’t exactly new, and was previously known as the San Antonio mine and later as the Bissett mine. San Antonio began production in 1932 and produced 1.36 million oz. gold from 4.87 million tons to 1978.

Rea Gold revived the project as the Bissett mine in the mid-1990s and carried out extensive underground development, but declared bankruptcy before production began. Underground work included deepening the A shaft to 4,200 ft. (1,280 metres), which eliminated the need for several winzes and allowed access to the bulk of the remaining resources.

A unit of South Africa’s Harmony Gold Mining (HMY-N, HRM-L) acquired the mine in 1998, and produced roughly 110,000 oz. before placing it on care and maintenance during a period of low gold prices. Total spending at that time was more than $120 million.

Since acquiring the mine, San Gold has consolidated its dominant position in the Rice Lake greenstone belt, which has geological similarities to the Red Lake camp in nearby northwestern Ontario.

San Gold holds about 15 km, or about 70 sq. km, of the favourable horizon hosting the Rice Lake mine, and three nearby deposits known as San No. 1, 2 and 3.

The company began commercial operations this spring, with ore coming from the Rice Lake mine and the smaller San No. 1 gold mine, which is connected to the 1,250-ton-per-day capacity Rice Lake mill by a 3.5-km-long private haulage road. At this stage, both mines are contributing equally to the current production rate of 400 tons per day, which is expected to double to 800 tons per day by year-end.

San Gold aims to increase production to 60,000 oz. gold next year, and steadily increase this to a target of 100,000 oz. annually in the years ahead. Cash costs are estimated to be below US$300 per oz.