Red Mountain shows feasibility

IDM Mining Ltd. June 26 said the results of a feasibility study for its Red Mountain confirms the positive economics for developing a high-grade underground gold mine at this gold project near Stewart in northwestern British Columbia.

The proposed 1,000-metric-ton-per-day year-round operation is expected to average roughly 78,000 ounces of gold per year over the nearly six year mine-life considered in the feasibility study.

Initial capital expenditure to fund construction and commissioning is estimated at C$135.7 million, with a life-of-mine cost of C$202.4 million.

Life of project direct cash cost is estimated at US$539 per ounce of gold recovered; net of the silver by-product, costs drop to US$492/oz. At a gold price of US$1,250/oz and an exchange rate of C$1 to US76 cents, the Red Mountain is calculated to generate a post-tax net present value (5 percent discount) of C$104 million; an internal rate of return of 32 percent; and is expected to payback initial capital in 1.9 years.

"This study demonstrates a high-margin, low-capex underground gold mine with a short development timeline, producing over 90,000 ounces of gold per year over the first two years of operation, with a life of mine average annual production of 78,000 ounces," said IDM President and CEO Robert McLeod. "With these positive results now in place, our highest priority is the ongoing exploration and resource expansion drilling adjacent to current reserves, with the objective of extending the potential mine life for Red Mountain."

McLeod said the development of a mine at Red Mountain would be great for the economy of his home town of Stewart.

"The project enjoys significant support locally and regionally and our goal remains to have approvals in place for a shovel-ready project by mid-2018," said IDM Executive Chairman Michael McPhie.

-SHANE LASLEY