Ideal time to ramp up Brewery Creek Mine

As the gold price rocketed through US$1,500 per ounce on Aug. 7, Golden Predator Mining Corp. announced it is accelerating the exploration and development drilling needed to restart operations at its Brewery Creek gold mine in the Yukon.

"This is the ideal time to intensify our Brewery Creek Mine work program which has been ongoing since 2009," said Golden Predator Mining CEO Janet Lee-Sheriff.

During seven seasons of operation beginning in 1996, Viceroy Resource Corp. produced 280,000 ounces of gold at the Brewery Creek Mine. However, with gold prices averaging around US$310/oz in 2002, Viceroy opted to wind down operations and put Brewery Creek on care and maintenance.

A few years later, Golden Predator acquired full ownership of Brewery Creek and has been carrying out exploration and studies aimed at resuming operations at the past producing mine.

"This mine shut down in 2002 due to a collapse in the gold price, not a failure of its technical underpinnings or a lack of gold resources. With the recent resurgence of the gold price and the lack of licensed projects in North America, we believe we can create significant new value by adding resources and working towards a near-term start-up of a relatively high-grade heap-leach project that has extensive economic and environmental information to support a viable operation."

Earlier this year, the Yukon government confirmed the validity of an existing Quartz Mining License and Water License for Brewery Creek, meaning Golden Predator is authorized to mine up to 4 million metric tons of mineralized material from areas designated under the plan and restart the existing heap-leach facility.

This territorial authorization has the support of the Tr'ondëk Hwëch'in First Nation, which passed a formal council resolution in support of resumed mining and processing at the Brewery Creek Mine under the existing licenses.

Expanding PEA resource

Golden Predator began its investigation of restarting operations at Brewery Creek with a 2014 preliminary economic assessment that outlined plans for a heap-leach operation that would produce an estimated 372,000 oz of gold over nine years. This includes mining 10.2 million metric tons of open-pit material from eight deposits averaging 1.35 g/t gold and reprocessing material located on the former heap leach pad.

According to a 2014 estimate, Brewery Creek hosts 14.15 million metric tons of indicated oxide resource averaging 1.27 g/t (577,000 oz) gold, 9.31 million metric tons of inferred oxide resource averaging 0.93 g/t (279,000 oz) gold; plus 3.46 million metric tons of indicated sulfide resource averaging 1.28 g/t gold (142,000 oz) gold, and 12.41 million metric tons of inferred sulfide resource averaging 1.37 g/t (546,000 oz) gold.

Out of this overall resource only about half of the oxide gold mineralization is considered in the PEA. The rest is outside of the current permitted area and will be part of the longer term mine plan and amended mining permits.

Looking to expand resources, one reverse circulation (RC) rig has already completed 1,200 meters of drilling on the property. To accelerate this work, the company plans to have two additional drill rigs turning by mid-August.

With three rigs turning, the company plans to complete 6,000 meters of drilling this year.

Two of the RC rigs will complete at least 4,500 meters of development drilling focused on expanding four resource areas – Fosters. Kokanee, Golden and Lucky – along a productive corridor in the permitted mining area.

The balance of this year's drilling will test exploration targets in underexplored areas to the north and south of the established mineralized corridor.

Pre-construction work

Golden Predator is also mobilizing heavy equipment to start pre-construction work in preparation for mine reconstruction at Brewery Creek, which is expected to begin in earnest in 2020.

With the heap-leach pad, roads and other infrastructure already in place, the company has a head-start on re-establishing the mine.

The activated carbon recovery plant that removes the gold from a solution produced in the heap leach pad, however, was removed.

The foundations for the building hosting the plant and assay laboratory buildings remain and testing is underway to see if new facilities can be raised on the former foundations.

Dirt-work for the balance of this year and into 2020 is expected to include:

• re-establishing the east and west access roads to gold recovery plant;

• removing soil cover from concrete foundations of the recovery plant and assay lab and surrounding area;

• regrading and relining three solution ponds in the heap leach facility;

• rehabilitating the haul road to Fosters for licensed ore extraction and waste disposal; and

• extracting mineralized material from licensed pits – Pacific, Blue, Moosehead, Canadian, Fosters, Kokanee, Golden and Lucky.

Other activities to be carried out toward the restart of the Brewery Creek gold mine are expected to include:

• permitted expansion of the existing camp;

• preparing three cells of the leach pad area for installation of liners and leak detection systems;

• rebuild gold recovery plant, power plant, assay lab, warehouses, maintenance shop, office buildings in permitted locations;

• construction of the crushing, processing and conveyor stacking systems;

• begin water sampling at established compliance sites;

• expand environmental studies; and

• commissioning the feasibility study for the initial phase of mine reactivation.

If the feasibility study demonstrates the viability of restarting the Brewery Creek Mine, Golden Predator says it plans to "proceed to production in a safe, environmentally respectful manner that can provide economic benefit to the company, the local community, the Tr'ondëk Hwëch'in and the Yukon."