Toronto’s Gowest Gold announced Jan. 23 that it has entered into a non-binding letter of intent with Northern Sun Mining Corp. to create a joint venture to own and operate 50 per cent of the Redstone Mill, near Timmins.
The 1,500-tonne of ore-per day mill is located just south of Gowest’s Bradshaw Gold Deposit, which is part of the company’s North Timmins Gold Project.
In a news release, the company said the mill is “well-situated to satisfy Gowest’s anticipated future ore processing requirements.”
Northern Sun will transfer all of the mill assets to the proposed joint venture corporation in exchange for shares of this new corporation worth $23 million.
Gowest will purchase a 50 per cent interest in the joint venture for consideration equal to $11.5 million.
In the agreement, the joint venture will process Gowest ore from its proposed 30,000 tonne bulk sample and the corporation will reserve an average of 500 tonnes-per-day of capacity in order to satisfy Gowest’s future ore processing requirements.
“We look forward to becoming equal partners with Northern Sun in the Redstone Mill, where we can process the material we extract from Bradshaw, and, with our partner, we can benefit financially by helping to secure additional feed for the remaining mill capacity from other regionally located mining companies,” commented Gowest president-CEO Greg Romain.
All the paperwork for the transaction will be finished by Feb. 28 with the deal being finalized soon afterward.
