Junior producers have become something of an endangered species these days, but Rea Gold (TSE) is bucking the trend and aiming to develop its second operating mine in British Columbia.
The company already has a 30% interest and a 5% royalty in the Samatosum polymetallic mine near Kamloops which is operated by partner Minnova (TSE). It began production in July, 1989.
Rea Gold President Larry Reaugh told shareholders at the company’s recent annual meeting that the operating success of Samatosum is reflected in the company’s financial results. Within the first half of 1990, he said, Rea Gold repaid its operating loan of $2.1 million and had no debt. And the company ended the year with net earnings of $277,705 on revenues of $12 million.
With Samatosum still operating in the black despite weak silver prices, Reaugh said the company is now turning its attention to advancing its next mine project.
After looking at a number of projects, the company recently launched a successful takeover bid for QPX Minerals, a VSE-listed company whose key asset is the QR gold deposit near Quesnel, B.C. As a result of this transaction, Placer Dome (TSE) now holds a 10.1% interest in Rea Gold. (DCC Equities and Princeton Mining also hold minority interests in Rea Gold.)
A feasibility study for the QR project is expected to be completed in late June. That will, among other things, determine the optimum mill design and pit design. In the meantime, metallurgical test work is continuing, and permitting and environmental work are considered well advanced.
Rea Gold also owns the Bissett gold project in Manitoba, a former producer complete with reserves and a mill. In order to be viable, the company said the project will require either higher gold prices or an increase in reserves that can be reached from existing workings.
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