Production planned for Mt. Hamilton

With the recent closing of a $24-million financing, the Mt. Hamilton gold project in eastern Nevada is one step closer to production.

Rea Gold (TSE) plans to use the net proceeds ($22.8 million) from the placement to exercise an option to acquire the property for US$5.2 million, subject to a 2.5% net smelter return.

The remaining proceeds will be used to bring the project into production at a capital cost of about US$12 million.

Mt. Hamilton contains about 9 million tons grading 0.052 oz. gold and 0.37 oz. silver per ton in two separate zones, with an overall stripping ratio of 5-to-1.

The planned 1.2-million-ton-per-year heap-leach mine will produce about 50,000 oz. gold and 193,000 oz. silver per year. The cash cost would be under US$240 per oz. gold equivalent during the first five years of production. All permits are in place and Rea plans to begin construction and pre-production stripping this June, with gold production slated for the fourth quarter.