Richmont Mines has completed a preliminary economic assessment (PEA) of development of mineral resources between the 450- and 860-m levels below surface at its currently operating underground Island Gold mine 83 km northeast of Wawa, Ontario. The PEA considered an 800-metric-ton-per-day (mt/d) mining operation.
The Island Gold mine is accessed via ramp from surface and is mined by long-hole stoping methods. The mill processed 181,785 mt of ore during the first nine months of 2015 at a head grade of 7.20 g/mt gold and recoveries of 97% to produce 40,837 oz of gold.
The PEA considers mining on three new long-hole horizons between the 450-m and 860-m levels. Following a transitional period in late 2015 and 2016, mining from 2017 to 2022 at a rate of 800 mt/d and an expected average diluted mined grade of 8.67 g/mt is projected to produce an average of 78,000 oz/y of gold.
Access to the lower levels is planned through continued development of existing internal ramps and raises. Mine utilities and the ventilation system will be extended from the existing infrastructure. The PEA indicates that once mining activities reach the third mining horizon in the first half of 2017, mining production has the potential to be increased to 1,150 mt/d.
Capital expenditures related to underground development, infrastructure, and milling and tailings facilities for the project are estimated at C$62 million. The PEA base case estimates average cash costs of production of approximately $552/oz for the 2017-2022 period. Total sustaining capital costs for 2017-2022 are estimated at C$40.5 million, with the majority of these expenditures in the first three years.
Richmont CEO Renaud Adams said, “Our growing confidence in the potential of the Island Gold mine underpins our long-term vision for this core asset, with the study being just the first step in unlocking that potential…. While the potential 1,150-mt/d expansion scenario indicates the utilization of a dedicated haulage ramp as the preferred option, we also see potential for additional mineral resources below the 1,000-m level. We will therefore continue to evaluate the potential for an internal shaft system in conjunction with the ramp system as we gain additional information from our drilling programs.”
The PEA for the mine-deepening project was based on measured and indicated resources of 200,096 oz of gold in 626,095 mt at an average grade of 9.94 g/mt and inferred resources of 442,067 oz in 1.2 million mt at an average grade of 11.04 g/mt. The PEA does not take into consideration the exploration potential of the deposit both laterally and at depth.
Any additional resources identified by Richmont’s 2015 exploration and delineation drilling program will be incorporated into a year-end 2015 mineral resource update, which will be part of a further evaluation process.