$20.8-million gold project Augmitto builds mine at Rouyn

A production decision has been made by Augmitto Explorations for the company’s 100%-owned gold property near Rouyn, Que. Located in Beauchastel Twp., the property hosts diluted reserves of 1.9 million tons grading 0.17 oz gold per ton. Costing $20.8 million, the mine will produce 62,000 oz of gold from a 1,000 ton per day milling operation beginning in December, president Norman E. Brewster says. At such a rate, the new mine will become the largest primary gold producer in the Rouyn area.

If geologically inferred reserves of 800,000 tons grading 0.184 oz gold per ton are eventually mined, the operation will have an eight year life. Costs are estimated at $53.57 per ton which translates into approximately $315 per oz of gold *

A contractor has been selected and work, including shaft sinking to 1,350 ft, is expected to begin by the end of February, Brewster tells The Northern Miner. Initial production will come via a decline ramp and a surface stockpile of development ore.

Augmitto has also purchased the Langmuir mill which is located near Timmins, Ont. Parts from this mill will complement equipment purchased last year from the former producing Madawaska uranium mine which was shutdown in the 1970s. “The total mill costs, including a carbon-in-pulp circuit are $8 million,” Brewster explains.

At the project site, the headframe is being clad in steel, ore storage bins have been erected and an assay lab is nearing completion. Mine service buildings are under construction and hydro power facilities will be connected shortly.

Funding for the project will come from an $8.3 million gold loan facility which Augmitto is arranging. Also, $2.8 million is expected to come from the exercise of warrants on Feb 16. Another $3 million could come from a Quebec government grant which Augmitto has applied for.

The remaining $7 million required for capital expenses could come from a bank loan or a convertible debenture. Both options are being explored by the company with European banking institutions, Brewster says. Augmitto has established close ties with Laurence Prust and Co., a London-based investment house controlled by Credit Commercial de France. Prust clients hold approximately four million Augmitto common shares.