Gowest Gold Ltd. has entered into a non-binding letter of intent with Glencore Xstrata's Kidd Operations, in Timmins, to process its ore at the Kidd concentrator (former metallurgical site).
The Division 'D' line at the concentrator will be refurbished to process Gowest's ore into a high-grade (90+ grams per tonne) gold concentrate. The proposed arrangement between the companies significantly reduces the cost and time of commercial production of the Frankfield East gold deposit.
It will significantly reduce Gowest’s capital cost requirements by an estimated $107 million, by eliminating the need to construct a stand-alone facility.
It will also enable Gowest to begin commercial production two to three years earlier since a new mill would not have to be constructed.
Gowest has completed a detailed concept engineering study for the mill refurbishment and is now advancing detailed mining plans and initiating a feasibility study. A definitive agreement is expected in the latter part of 2013.
Gowest is planning to begin commercial production of its Frankfield East gold deposit in 2015.
“We have achieved an extremely important milestone in our plans to develop our Frankfield East deposit into the next new gold mine in the Timmins Camp,” said Gowest president and CEO, Greg Romain.
“The use of the Kidd Operations mill will significantly reduce our capital expenditures and expedite our path to generating cash flow. It is also evidence of Glencore Xstrata's willingness to support the continued development of the Timmins economy.”
Gowest is a Canadian gold exploration and development company focused on the delineation and development of its 100 per cent-owned Frankfield East gold deposit, part of the company's North Timmins Gold Project.
