Golden Queen gets water board approval for Soledad

Vancouver – Golden Queen Mining (GQM-T) has crossed another milestone for its Soledad Mountain gold-silver open-pit project after receiving approval for its waste discharge requirements and monitoring and reporting programs.

The Lahontan Regional Water Quality Control Board unanimously approved the plans and recommended adopting an order to approve the discharge requirements. Golden Queen expects final approval once the location of an additional groundwater monitoring well is finalized.

The water board go-ahead was critical for the construction and operation of the heap-leach pads, rock stockpiles and other activities that could affect nearby waters.

The company has long been working to open an open-pit mine near Mojave, California and finally seems to be making headway.

The news comes only weeks after the company received final environmental approval for the project from the Kern County Planning Commission.

Reserves stand at 46.6 million tonnes grading 0.70 gram gold per tonne and 12.96 grams silver per tonne. The company estimates a 12- year mine life and annual production of 90,000 oz. gold and 1 million oz. silver.

The 2007 feasibility study outlined an open-pit heap-leach mine with an average throughput of a little over 11,000 tonnes a day, producing gold at a cost of US$427 per equivalent oz. gold. Capital costs were pegged at US$59.8 million.

Using a conservative US$600 per oz. gold and US$12 per oz. silver base case, the company estimated a net present value of US$69.6 million, at a 5% discount rate, and an internal rate of return of 18.4%, both calculated on a pre-tax basis.

The company recently earned $8 million from a non-brokered private placement by Gammon Gold (GAM-T, GRS-N) for 5 million units at $1.60 each. Each unit consists of one share of Golden Queen, one quarter of a warrant exercisable at $1.75, and one quarter of a warrant at $2 for a period of 18 months after closing. When the deal is closed Gammon will hold about 5.3% of Golden Queen.

Golden Queen’s share price was up 13¢ or 9.7% on the latest news to close at $1.47. The company has a 52-week share price range between 53¢ and $1.55 and 94 million shares outstanding.


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