Shares in first California Mother Lode mine in 55 years soar 180%
Back in the day[/caption]Sutter Gold Mining (CVE:SGM) stock soared as much as 180% out of the gate on Tuesday, a move the BC-incorporated micro-cap was at a loss to explain.
By early afternoon the junior had given up some of the gains to change hands at $0.10, still up 81.8% on the Toronto Venture Exchange. More than 220,000 shares changed hands on Tuesday – typically the counter goes days without a single transaction.
The Lakewood, Colorado-based firm which issued a statement saying it is not aware of any material change that would account for the share price move, is now worth $12.4 million. The volatile counter hit a high of $0.40 in 2012 over excitement about its main asset – the Lincoln Project located in Amador County on the California Mother Lode Gold Belt.
The company – backed by South Africa's Rand Merchant Bank – is currently in the process of completing the mill construction and underground development at the Lincoln site and also owns a property in the Northern Baja region of Mexico.
Sutter has procured a $20 million loan and sold forward production for another $20 million to advance the project which would be the first new commercial gold mine in the Mother Lode in more than 55 years.
The Lincoln-Comet and Keystone zones have a NI 43-101 compliant Indicated Resource estimate completed in February 2008 which shows contained ounces of just over 223,000 ounces and another 459,000 ounces inferred. Annual gold production is pegged at 23,000 ounces with cash costs before royalties of $704 an ounce.
Half of Lincoln's output would fulfil the forward sale agreement and the rest will be sold at market prices.