Alaska Apollo plans 200 ton/day gold mine

An independent report on Alaska Apollo Gold Mines’ Shumagin gold property on Unga Island, Alaska, estimates the cost of bringing the 200-ton-per-day mine on-stream to be much higher than the company anticipated.

Kilborn Engineering estimates the cost to develop the Shumagin West orebody, using all new equipment and machinery, will be $12.1 million. The Alaska Apollo estimate, using second-hand, reconditioned equipment, is $4.1 million, which it now says is realistic but “possibly on the low side.” Discussions have already begun to buy an existing mill that could be shipped and erected on the property within a year, the company says.

The underground mine is expected to produce about 30,000 oz gold and 125,000 oz silver per year. Kilborn estimates operating profit to be $140 per ton or $9.9 million per year, at a gold price of $460(US). This is based on an average cut and diluted grade of 0.524 oz gold and 2.47 oz silver over a 10.2-ft width. The initial 300,000- ton orebody in the West zone will be target of the first production effort. Grading 0.49 oz gold and over 2 oz silver, the orebody contains about 150,000 oz gold and 1.1 million oz silver.

Alaska Apollo says it will use the report for production planning in the months ahead.