Nov 5 2015
Goldsource Mines Inc. is pleased to announce that construction at its Eagle Mountain Gold Project located in Guyana, South America continues to progress well.
Phase I of Eagle Mountain anticipates a 1,000 tonnes per day open pit ‑ gravity plant with estimated pre-production capital costs of US$4.0 million to US$5.0 million and post-commissioning cash operating costs of US$500 to US$600 per ounce of gold.
All current plans are based on the Preliminary Economic Assessment of the Eagle Mountain Saprolite Gold Project, Guyana Technical Report ("PEA") prepared for the Company by ACA Howe International Limited, dated effective June 15, 2014, and filed September 16, 2014 on SEDAR at www.sedar.com. Further details on the PEA are also provided in the Company's news release, dated July 31, 2014, available on the Company's website together with the PEA at www.goldsourcemines.com.
Yannis Tsitos, President stated, "We are pleased with Eagle Mountain's construction progress with most of our mine construction tasks either completed or nearing completion. We fully expect to deliver the Phase I construction on-time and within the downwardly revised pre-production capital costs of under US$5.0 million."
The most significant construction activities are as follows:
- Construction of gold processing plant (100 tonnes per hour) from Sepro Minerals Systems Corp. ("Sepro"), Langley, Vancouver, BC, delivered to Guyana in two shipments, as follows:
- Shipment #1, consisting of six 20 to 40 foot sea containers and miscellany equipment shipped from Canada and United Kingdom, delivered to Eagle Mountain (100% completed).
- Shipment #2, consisting of ten 40 foot sea containers and miscellany equipment shipped from Canada, United States and Mexico, delivered to Eagle Mountain (100% completed).
- Rehabilitation of the existing ten kilometre road between Mahdia town (commercial airport) and Eagle Mountain camp (100% completed).
- Procurement & purchase of major mining equipment (100% completed).
- Procurement & purchase of secondary gold processing plant for exploiting existing old tailings area for construction aggregate and residual gold recovery (100% completed and operating).
- Pre-production auger drilling program for confirmation and condemnation (100% completed).
- Recruitment of key operations personnel (90% completed).
- Site preparation of all facilities (70% completed).
- Site assembly of semi-modular process plant in Q4 2015 (20% completed).
Sepro commissioning team will arrive on-site in mid-November to finalize construction and target initial production, as scheduled, by end of year 2015.
Further condemnation auger drilling in Q2 and Q3, 2015 of several alternative plant sites intersected additional mineralized saprolite. The most significant condemnation auger intersect was 5 metres grading 12.75 grams per tonne gold. The plant is semi-modular and if mineralization is intersected within the plant area, it can be moved in the future. Additional drilling is planned in 2016 in new areas of mineralized saprolite, which could potentially expand resources.
US$1 Million Loan Facility
The Company has secured a loan facility (the "Loan") with Mitan Holdings Ltd. ("Mitan Holdings") for a principal amount of US$1.0 million. This amount can be drawn down in full during the period of 90 days following November 2, 2015. The purpose of the Loan is to provide the Company with additional funds, which may be necessary for operating capital requirements during the commissioning phase of Eagle Mountain. The Loan is repayable in full, 12 months after the draw-down and will bear interest at a rate of 12% per annum, payable quarterly. Goldsource has pledged the shares of its wholly-owned subsidiary, Eagle Mountain Gold Corp., to Mitan Holdings as security for the Loan and has paid a commitment fee of US$15,000 upon execution of the Loan Agreement.
J. Scott Drever, CEO stated, "We currently have approximately US$1.3 million in cash and estimate US$0.6 million left to spend before initial gold production. This loan facility is meant to help financially de-risk the plant startup for any unforeseen challenges and can be used for planned Eagle Mountain optimization and expansion capital in 2016."
Mitan Holdings is a company controlled and directed by a director of Goldsource. The director together with Mitan Holdings, control approximately 12.5% of the outstanding shares of Goldsource. The Loan is considered to be a "related party transaction" within the meaning of TSX-V Policy 5.9 and Multilateral Instrument 61-101. The Company is relying on exemptions from the valuation and minority shareholder requirements of MI 61-101.