The Toronto miner reported Nov. 12 that it has inked a memorandum of understanding with a “third party processor” in Timmins with enough capacity to process ore from Gowest's Frankfield East gold deposit.
The business plan is to produce high-grade gold concentrate to be sold through a separate off-take agreement.
Baseline environmental studies finished last summer and the mining permit application process has started in anticipation of beginning mine development in late 2013.
The company invited Commodas Ultrasort Inc. to do a commercial test of ore sorting equipment to demonstrate ways of reducing the quantities of rock being handled, while doubling the gold content in the crushed material sent to the final processing plant.
Gowest president-CEO Greg Romain is pleased with the continuing talks with these potential partners.
“The results of our preliminary economic assessment demonstrated the potential at a gold price of $1,500 per ounce for Gowest to generate cash flows of greater than $50 million a year from the production of 95,000 ounces of gold starting within 30 months.”
The Frankfield East deposit has 348,000 ounces of gold in the indicated category at a grade of 6.68 grams per tonne, plus 838,900 ounces in the inferred category at a grade of 6.01 grams per tonne.