Golden Queen waiting on California permits

Golden Queen Mining (GQM-T, GQMNF-O) has completed a new feasibility study for its Soledad Mountain gold-silver project in southern California, but the company won’t know for a while if it can move forward.

California’s tough mining laws have forced Golden Queen to make amendments to its proposed open-pit heap-leach operation.

The government introduced backfilling requirements for certain types of open-pit metal mines in 2002.

Golden Queen, however, believed the new rules would not apply to it under a grandfathering provision that was included in the regulation.

The company argued that nothing had changed since a previous environmental assessment of the project, completed in 1997.

Although the local Kern Cty. government supported the company, the state disagreed and rejected Golden Queen’s application for mining permits last January.

After that, the company hired Norwest Corp. to do a life-of-mine waste rock management plan.

The plan incorporates sequential and partial backfilling of mined-out phases of the open pit with no double handling of waste rock at the end of the mine life.

Golden Queen will begin a revised environmental impact report in the new year.

According to the feasibility study, Soledad Mountain has proven and probable reserves of 46.6 million tonnes grading 0.703 gram gold per tonne and 12.96 grams silver for a total of more than 1 million oz. gold and 19.4 million oz. silver.

The project would produce about 75,000 oz. gold and 950,000 oz. silver per year over a mine life of 12 years.

Ore would be processed at a rate of 4.5 million tonnes per year once in full production.

The primary rock types to be mined are rhyolite porphyry and flow-banded rhyolite, pyroclastics, quartz latite porphyry and siliceous vein material.

It’s estimated the project would cost US$57.7 million, followed by another US$2.1 million as working capital, with cash flow expected to turn positive after nine months of production. Another US$15.5 million would be needed down the line for equipment leases and for construction to the second and third stages of the heap-leach pad.

Cash operating costs are projected at US$9.90 per tonne.


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