Jan 27, 2021
 in 
Precious Metals

Gold Mountain (TSX.V: GMTN) Signs Ore Agreement With New Gold

Gold Mountain Mining Corp. (TSX.V: GMTN) is a BC based exploration and development company focused on developing their 100% owned Elk Gold Project, a past producing gold mine located 57 Km from Merritt, BC. The project is 2km off Highway 97C, and is accessible via an all seasoned gravel road.

Gold Mountain (TSX.V: GMTN) is currently undergoing a 7,300m diamond drill program on the Elk Gold Project. The company just announced that they have entered into an agreement with New Gold Inc. (TSX: NGD), whereby:

  • Gold Mountain will deliver ore to New Gold’s New Afton Mine located 130km from the Company’s Elk Gold Project in Kamloops, British Columbia.
  • Pursuant to the OPA, New Gold has agreed to pay Gold Mountain in a timely manner based on the tonnes and grade of the ore delivered to the mill independent of when it's processed.
  • The OPA provides the Company with an efficient path towards initial production following the receipt of necessary permits.

Kevin Smith, CEO of Gold Mountain states, “Signing the OPA with New Gold represents another key milestone and partnership for Gold Mountain. This agreement will help advance initial production at the Elk Gold Project by eliminating the time and capital required to build on-site infrastructure. We are confident in our ability to execute on our mine plan and deliver significant value for our shareholders.”

New Gold (TSX: NGD) is an intermediate gold producer which holds a portfolio of two core producing assets located in Canada, as well as an 8% gold stream on the 100% owned Artemis Gold (TSX.V: ARTG) Blackwater development project (all based off information on New Gold’s website: https://www.newgold.com/home/default.aspx):

  • Rainy River, a gold-silver mine in Ontario (2.6Moz of gold & 6.3Moz silver in reserves)
  • New Afton, a gold-copper mine in British Columbia (1Moz of gold, 2.8Moz of silver & 802M pounds of copper in reserves)
  • Blackwater Project 8% gold stream (8.2Moz of gold & 60.8Moz of silver in reserves)

New Gold produced 437,617oz AuEq in 2020 (293,139 ounces of gold, 636,952 ounces of silver and 72.1 million pounds of copper). As of today, New Gold has 680.25M shares outstanding, and is currently trading at $2.42, giving it a market cap of $1.64B

With a clear path to production, Gold Mountain (TSX.V: GMTN) is positioned perfectly to further develop The Elk Gold Project. The company plans to start gold production by Q4 2021, starting with a planned Phase 1 production of – 19,000oz/year gold, which will self-fund them to the proposed 50,000oz/year gold by 2025.

As of today, Gold Mountain (TSX.V: GMTN) has 48.9M shares outstanding, and is currently trading at $1.28, giving it a market cap of $62.59M.


DISCLAIMER: Gold Mountain is a marketing client*

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