Rye Patch Restarts Florida Canyon Mine
Rye Patch Gold Corp. (RPM:TSX.V; RPMGF:OTCQX) announced on March 30 that the Bureau of Mining Regulation and Reclamation has approved the commencement of irrigation on the new South Heap Leach Pad of the Florida Canyon mine in Nevada.
According to the company, "mining, crushing and loading of the South Pad are ramping up and are nearing 70% of the forecast production rate coming into the end of the first quarter." The first gold pour is expected this month and commercial production is expected to commence by mid-2017."
On April 5 iA Securities initiated coverage on Rye Patch with a Buy recommendation. Analyst George Topping noted that the Florida Canyon project "has been redeveloped for commercial production, at a cost of US$29M, which began spraying in late March 2017. The property includes a 1.1 Moz Au M&I oxide resource that is expected to be expanded through additional exploration of the area. All infrastructure needed for the mine is on site, including power, water, transportation, and manpower."
Topping recounted progress at the project, writing that the "majority of the tasks needed to restart the Florida Canyon Mine have been completed. The fleet has been refurbished, the first cell of the SHLP pad has been built, the 20K tpd crusher has been moved and upgraded, the pads have been loaded and stacked, and mining and leaching has commenced, with the first blast in November 2016."
The analyst noted that the Florida Canyon project, based near Reno, Nevada, "would make a good 'tuck in acquisition' for Newmont, Kinross, and Barrick, among others. Alternatively, Nevada is host to multiple deposits that would allow Rye Patch to materially grow beyond the currently identified projects."
Topping expects the project to grow: "With cash flow from the commencement of operations, we expect management to bootstrap the multiple satellite projects into a low cost, sizeable 140 Koz AuEq p.a. producer in the safe, mining friendly Nevada jurisdiction. The area is prospective for additional deposits that should allow further expansion. With cash flow, management will start exploring around its existing deposits, as well as regionally."
"Rye Patch has a sizeable resource with a solid project pipeline led by experienced management in a mining friendly jurisdiction. Shareholders can find near-term value in the Florida Canyon project starting commercial production this month, and can expect extensive growth further down the line," concluded Topping.
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Disclosure from iA Securities, Rye Patch Gold Corp., April 5, 2017
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Source: The Gold Report (4/11/17)