Richmont Mines thinks it has the plan to “unlock the full potential” of its Island Gold Mine near Dubreuilville.
The Toronto miner has tabled a new preliminary economic assessment (PEA) for its northeastern Ontario operation.
The company said the PEA supports its case to increase its underground mine and mill productivity to 1,100 tonnes per day to support production growth of 22 per cent, at cost of $28.2 million over the next eight years.
The mine is located 83 kilometres northeast of Wawa.
Richmont said the ramp-up to the 1,100 tonnes-per-day target is underway and they expect to reach that run rate in late 2018.
The operation is expected to produce an average of 125,000 gold ounces per year, excluding the 2017 and 2018 ramp-up period, or 115,000 ounces over the eight-year period.
“With minimal capital, we are positioning the mine as a low-cost operation that is anticipated to generate strong cash flow streams after funding all project and sustaining capital,” said company CEO Renaud Adams in a May 29 press release.
The object of the PEA was to find the most cost-effective way to mine the existing gold resource down to the 1,000-metre level using existing mine infrastructure.
The company insists there’s plenty of potential to extend the mine life even further as the PEA only includes 24 per cent of its total inferred resources – leaving out more than 750,000 inferred ounces – and doesn’t include some promising drill results they’ve found to the east and at depth, below the 1,000-metre level.
"All resources outside the main area of interest, below the 1,000-metre level and east of the PEA area, were excluded but will eventually be considered in a potential Phase 2 expansion as we continue to grow the resource inventory through our strategic drilling programs,” added Renaud.