Gold mining back to Nova Scotia with imminent Moose River mine construction
Gold mining is set to come back to Canada’s Nova Scotia as Vancouver-based junior Atlantic Gold (TSX-V:AGB) is just a week away from being able to use a $115-million line of credit to begin construction at one of the mines that are part of its Moose River project.
Touquoy Gold open pit mine, expected to reach full production in 2017, would be the first one to be built. After it is up and running, Atlantic Gold plans to develop another open pit at the neighbouring Beaver Dam property, located about 37 km by road from Touquoy.
Together, they are forecast to produce 87,000 ounces of the yellow metal a year during their eight to nine years of mine life.
After Touquoy Gold is up and running, Atlantic Gold plans to develop another open pit at the neighbouring Beaver Dam property.
While Nova Scotia has experienced three relatively short-lived gold rushes over the past 150 years, the persistent issue has been profitably.
Gold deposits in the area are referred to by geologists as “nuggety” pockets of high gold concentrations located sporadically in quartz veins. The difficulty this has long posed is access — how to chase narrow veins of rock with random pockets of gold at a reasonable cost.
As a consequence, a few companies have come and gone, with the most recent case being Ressources Appalaches’ Dufferin mine. The asset produced 921 ounces of gold during its one year of operation in 2014, significantly less than its target of 20,000 ounces per year.
Eventually, the operation was put into receivership after its owner defaulted on $11 million in loans from Lascaux Resource Capital Partners of New York.
The province of Nova Scotia has received $18,000 to maintain the key exploration licence at Dufferin, which consists of 14 claims covering 226 hectares of land. That lease, however, expires next month.
Despite the hic-cups, analysts believe the province is ready to reap rewards from the extraction of its 2.7 million ounces of proven gold reserves through business tax, income tax, royalties and employee spending.
After dropping 40% from a 2011 peak of $1,920 an ounce in the closing months of 2015, gold has gained more than 25% so far this year to above $1,330 an ounce, defying predictions that it would tumble to below $1,000.