Madsen has funds in place for mill

Proceeds of $5.2 million from four private placements will enable Madsen Gold (MGF-T) to reconstruct the former Dona Lake mill in Red Lake, Ont.

Madsen may also issue flow-through shares to generate $1.5 million for underground exploration work and bulk sampling. The only funding then required to bring the deposit to production would be another $1.5 million, for working capital and minor additional capital costs. Madsen hopes to arrange a line of credit or a gold loan for this amount.

Dewatering of the mine is about to reach the sixth level (at a depth of about 285 metres). Four drills are operating underground, and two vein systems are being blocked out on the third level. The fourth level is being cleaned up to permit access to underground exploration targets in the western part of the mine.

The company is preparing to drill-test the mine’s ultramafic unit, which is host to high-grade mineralization at deep levels.

Surface stripping for the mill is scheduled to start immediately, and the mill should be complete by April 1997. Startup is projected for June of that year.