Teeshin seeking $15 million to build gold mine

Teeshin Resources (VSE) says it needs at least $15 million to build a 350-ton-per-day gold mining and milling operation at the Dome Mountain project, 23 miles southeast of Smithers, B.C. The company recently updated its feasibility study for the project, and received firm pricing on most major components for the proposed development. Environmental impact studies have also been completed and approval has been given by the British Columbia government to proceed with final permitting.

Minable reserves stand at 325,000 tons grading 0.35 oz. gold and 2.3 oz. silver per ton, according to Teeshin. Most of the reserves occur in the Boulder zone — a series of parallel and overlapping quartz veins in shear structures. That zone has been intersected by 224 drill holes and explored underground by an adit, drifting and raising.

Based on current reserves, the mine would have a 3-year lifespan, yielding around 37,000 oz. of gold and 100,000 oz. silver annually. Production costs are expected to average around $209 per oz. gold. A feasibility study forecasts 95% recovery for gold and 40% for silver by standard cyanidation.

Stalled for two years by legal disputes involving its previous partners, Teeshin is now acquiring the remaining one-third interest in the project it does not already own from Canadian United Minerals (VSE) for $1.27 million.

With 100% control of the project, Teeshin says it will examine various financing alternatives to obtain the necessary funds for production.

A new discovery, made earlier this year about 1,000 ft. east of the Boulder zone, is expected to add to the known reserves, and development of additional tonnage is under way. Current drilling on the easterly extension of the Boulder zone is designed to increase the life of reserves up to five years. Teeshin says about 20,000 ft. of additional drilling is needed to increase the minable reserves to 500,000 tons.

In the past two years, poor market conditions and legal disputes have hampered the company’s efforts to raise capital. But, a recent resolution of the legal problems and improving gold prices could lead to a production start this year.

Last month, the company arranged a $600,000 loan from its president, Stafford Kelley, and it is also negotiating a longterm $1.5- million debenture financing to retire that loan, and provide additional funds for the Dome Mountain project.

Shares of Teeshin, of which there are nearly 20 million issued and outstanding, have traded recently at 33 cents within a 12-month trading range of 15-75 cents.