Gold Mountain Mining Corp. (TSXV: GMTN)(OTCQB: GMTNF)(FRA: 5XFA) is pleased to announce the Company has mined its first significant mineralized material at its 100% owned Elk Gold project near Merritt, BC.
- The Company has exposed its 1100 vein system located on the footwall of historic pit 2.
- This area was mined by previous operators in 2012 at an average grade of 16.60 g/t.
- The Company will crush, weigh and assay the material prior to sending it to its Ore Purchase partners New Gold Inc.
- Year 1 of Gold Mountain's mine plan contemplates mining some of the resource's highest-grade material, resulting in an expected annual after-tax profit of $10,000,000.
"First mineralization along our 1100 vein in Siwash North marks the Company's transition from development into commercial production," commented Director and CEO Kevin Smith. "Since purchasing the Elk Gold mine there have been questions surrounding Management's ability to increase resources and get the project back into production. Fast forward to today, we're targeting our third resource update, have successfully navigated the Provincial permit amendment process, completed all of our construction and are now stockpiling paydirt from our shallow mineralization. By completing our waste rock stripping and site preparation in parallel to our work with Indigenous Communities and Provincial Regulators on our permitting, we have been able to maintain our timelines of delivering material to New Afton and recognizing revenue in Q4 2021. The Mining Permit, TSX uplist and hitting mineralized material all in the first nine days of November highlights management's focus towards execution and maintaining our committed timelines. Keep an eye out for more developments, as we intend to continue delivering value to our loyal shareholders and a very strong finish to the year."
After spending 4 months waste rock mining through its gravel borrow, Gold Mountain has exposed its first high-grade mineralized material at its Elk Gold mine. The targeted vein systems strikes east -west and are currently being mined at the footwall of historical Pit 2. This zone of the property was mined in 2012 by previous operators and yielded a grade of 16.60 g/t, surpassing the contained ounces in the resource model by roughly 29%. See section entitled "Preliminary Economic Assessment" below for more information.
The Company was able to transition into full-scale mining operations for less than its forecasted $9m capital expenditure due to the project's existing infrastructure. Gold Mountain also reduced its upfront costs by avoiding the need for an on-site mill and tailings storage facility through its Ore Purchase Agreement ("OPA") with New Gold Inc. The Company will be targeting some of the resource's highest-grade mineralization during the first year of its mine plan, expediting the payback period to 6 months.
With the Company hitting mineralized material, it is in a strong position to achieve revenue in Q4 ‘21. Gold Mountain will now turn its focus to the following operating milestones:
- Continue to engage directly with surrounding Indigenous Communities to adhere to each Nation's independent review process.
- Ramp up mining operations, targeting the Elk's high-grade 1100 and 1300 vein systems.
- Deliver material to New Gold's New Afton mine in Kamloops, located 133 km from the Elk Gold Project.
- Begin revenue generation and receive payment from its first mineralized material delivery.
The Company will mine, crush and sample the mineralized material prior to hauling the load 133km to its Ore Purchase Partner New Gold Inc.'s New Afton Mine in Kamloops, British Columbia. Haul trucks will be weighed on-site and a third-party lab will assay the batch sample to determine the grade and value of the load. Gold Mountain will be paid monthly, based on the weight and grade of all deliveries during the previous month. The Company filed a copy of the Ore Purchase Agreement on February 3, 2021 and can be viewed on the Company's SEDAR profile at www.SEDAR.com.
New Gold is working with Indigenous Nations and local regulators to amend its permit which will allow the mine to receive the Elk Gold's high-grade mineralized material. Both companies anticipate this will not interrupt Gold Mountain's mining processes and revenue forecast for Q4 2021.
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