The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
New Saber Gold to have two gold mines in near-term pipeline North of 60 Mining News – July 2, 2021
Copperstone hosts more than US$110 million of the infrastructure needed to resume mining, including a fully permitted 600 t/d mill and assay lab.
Home to an open pit mine that operated in the 1990s, Brewery Creek hosts 798,000 ounces of gold in 22.2 million metric tons of indicated leachable resource averaging 1.11 g/t gold.
Less than two months after ending its plans to merge with Viva Gold Corp., Golden Predator Mining Corp. has cut a deal to join forces with another junior advancing a gold mine in America's Southwest.
In a deal announced on June 28, Golden Predator plans to merge with Arizona Gold Corp. to create Sabre Gold Corp., an emerging North American gold producer with the fully permitted Copperstone gold mine in Arizona and the past-producing Brewery Creek gold mine in Canada's Yukon.
"We view this as a great opportunity to bring together the advanced-stage Copperstone Mine and the Brewery Creek Mine, both former producing gold mines in superior jurisdictions, under the same umbrella to leverage a shared technical team and corporate infrastructure," said Arizona Gold CEO Giulio Bonifacio.
Arizona gold
Acquired by Arizona Gold in 2014, Copperstone is home to an open-pit mine in western Arizona that produced roughly 500,000 ounces of gold from 1987 to 1993. American Bonanza, which acquired the historical mine in 2002, constructed a 450-ton-per-day floatation mill at the project in 2012 and produced another 16,900 oz of gold from 163,000 tons of ore averaging 0.104 oz/t (approximately 3.6 grams per metric ton) gold from two declines that were previously developed in the bottom of the open pit.
As a result of the past work, Copperstone hosts more than US$110 million of the infrastructure needed to resume mining, including a fully permitted 600 t/d mill, 4,000 meters of underground development, grid power, water wells, tailings pond, assay lab, mechanics shop, offices, and other support buildings.
A 2018 prefeasibility study outlined a 40,000-oz-year gold mine at Copperstone with an after-tax net present value (5% discount) of C$25.6 million and an after-tax internal rate of return of 40.1%.
This mine is based on approximately 1.12 million metric tons of measured and indicated resources averaging 7.63 g/t (276,100 oz) gold.
A new resource estimate that includes 13,000 meters of drilling completed by Arizona and takes into account higher gold prices is expected by mid-year.
"I have long been aware of and admired the Copperstone project, from its days as an open pit mine to its current incarnation as an underground operation," said Golden Predator Mining Chair William Sheriff.
This new incarnation of Copperstone took a step forward with the closing of an US$18 million project financing with Star Royalties Ltd. last November. The funds forwarded from this streaming agreement are being used to prepare the mine for the planned restart of mining at Copperstone before the end of this year.
Yukon Gold
Golden Predator's contribution to the merged company includes Brewery Creek, a road-accessible project about 35 miles (55 kilometers) east of Dawson City, Yukon that is home to a mine that produced roughly 280,000 oz of gold over seven years of mining that began in 1996.
The licenses for this operation have been maintained, which provides a head start for getting approvals for the resumption of mining.
Earlier this year, Golden Predator submitted applications to renew the water use and quartz mining licenses for Brewery Creek, which would otherwise expire at the end of this year.
Tr'ondëk Hwëch'in First Nation has submitted letters to the Yukon Water Board and the Yukon Environmental and Socio-economic Assessment Board in support of the timely renewal of these licenses.
A feasibility study underway is detailing plans for a phased resumption of mining at Brewery Creek.
As currently envisioned, the initial phase of the renewed operation would involve the reprocessing of material on the heap leach pad, which hosts roughly 248,000 oz of unrecovered gold, and newly mined oxide ore from areas of the Brewery Creek property already permitted for mining.
According to a 2020 calculation, Brewery Creek hosts 22.2 million metric tons of indicated leachable resource averaging 1.11 grams per metric ton (789,000 ounces) gold, plus 16.8 million metric tons of inferred leachable resource at 0.92 g/t (497,000 oz) gold.
A 32-hole drill program completed last fall focused primarily on expanding and upgrading these resources ahead of the feasibility study.
Brewery Creek also hosts 30.6 million metric tons of inferred sulfide resource at 0.84 g/t (828,000 oz) gold, which will be considered for mining in later phases of Brewery Creek operations.
A second expansion phase of the operation is expected to include potential mining of the sulfide resources and gold mineralization identified outside of the area that falls under the permits from 1990s-era mining.
In addition to Brewery Creek, Golden Predator owns two gold exploration properties in the Yukon, a 20% stake in Group 11 Technologies Inc., a company advancing in-situ gold mining technologies, as well as stock positions in Seabridge Gold Inc. and C2C Gold Corp.
Sabre Gold
Under the terms of the merger agreement, every Golden Predator share will be exchanged for 1.65 shares of Arizona. Upon completion of this transaction, existing Arizona shareholders will own roughly 55% of Sabre Gold and Golden Predator shareholders will own the remaining 45% of the merged company.
As a result, Sabre Gold will be a near-term gold producing company with two projects in the pipeline that have a combined 1.1 million oz of gold in the measured and indicated resource categories, 1.5 million oz in the inferred category, and exploration upside at both properties.
The merged company will also benefit from a combined treasury of around C$23 million and a stronger management and technical team, with backgrounds in both mine-building and operations.
"The combined company will provide for stronger peer positioning amongst gold producers as we advance Copperstone to production in the very near term, and continue to advance Brewery Creek towards a re-start decision," said Bonifacio, who will assume the role of president and CEO of Sabre Gold.
Sheriff will serve as non-executive chairman of the Saber Gold board, which is expected to include three representatives from each Golden Predator and Arizona.
The merger agreement has been unanimously approved by the current directors of both companies.
In addition to board member recommendations, certain shareholders have indicated support to vote in favor of the transaction, including Eric Sprott, who is a shareholder of both Golden Predator and Arizona.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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