Hemlo Mining (TSX: HMMC; US-OTC: HMMCF) plans to keep its namesake northwestern Ontario gold mine running for about 20 more years by raising output and filling a mill operating at 40% capacity.
The company is spending $130 million (C$183 million) this year on 130,000 metres of drilling, mine development and new equipment at the operation, about 800 km northwest of Toronto. Hemlo aims to lift throughput to 4,800 tonnes per day by year-end and 6,000 tonnes by the end of 2027; the mill can process 10,000 tonnes, according to Hemlo Executive Chair Jonathan Awde.
“Our strategy is quite simple: fill the mill. The geology’s there,” Awde told The Northern Miner’sWestern Editor, Henry Lazenby, this monthat the Rule Symposium on Resource Investing in Boca Raton, Fla. “Our objective is to show how we can sustain something north of 6,000 tonnes per day for something close to two decades.”
The plan will test Hemlo’s purchase of the 40-year-old mine from Barrick Mining (TSX: ABX; NYSE: B) for as much as $1.09 billion. Raising production toward 200,000 oz. a year without building a new mill could spread fixed costs over more ounces, while the June resource estimate of 96.9 million measured and indicated tonnes grading 1.55 grams gold per tonne for 4.8 million oz. gives Hemlo a larger base for an updated mine plan due in in about 12 months.
Watch the interview below:
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