Gold Mountain signs LOI with New Gold on 400% bump in ore deliveries
(Kitco News) - Gold Mountain Mining (TSX.V:GMTN) announced today that it has signed a letter of intent ("LOI") with New Gold to increase its tonnage delivered to New Afton from 70,000 to 350,000 tonnes per annum beginning in year four of production.
The company said that this addition reflects a 400% bump to the delivery commitments outlined in the company's ore purchase agreement with New Gold and provides a clear path to scale mining operations without the need for an on-site mill.
The company foregoing an on-site mill was a substantial driver for reducing its all-in sustaining costs from $735/ounce to $554/ounce. Ramp up in mining operations to 350,000 tonnes per year is scheduled to begin 2024.
The company added that a new plan eliminates a large amount of CapEx and reduces the environmental impacts by not building an on-site mill and tailings storage facilities. This will allow Gold Mountain to reallocate that capital into continuing to aggressively explore the property, as well as accelerate the remediation and expansion of the existing underground decline.
With the LOI in hand, Gold Mountain said it will now look to streamline the permitting process required to scale production by avoiding the environmental impact of an on-site mile. The company anticipates increasing production to 350,000 tonnes per year beginning in 2024 subject to both the company and New Gold obtaining the necessary regulatory approvals.
Gold Mountain is a British Columbia based gold and silver exploration and development company focused on resource expansion at the Elk Gold project, a past-producing mine located 57 KM from Merritt in South Central British Columbia.