Prodigy Gold continues to advance its Magino Project along towards production. The company issued an update this week on the status of the various planning and permitting work currently underway. A feasibility study is in process to gauge the economic merit for the project, a prerequisite for obtaining bank financing. Environmental baseline sampling is also necessary as part of the permitting process, to monitor water and air quality, and establish overall data points for the ecology of the area prior to development or mining activity. The local First Nations groups have been involved in the process and consultation. The company expects to have this work finalized by the end of this year. Magino is a large, low grade gold deposit with total resources approaching 4 million ounces of gold.

Scorpio Gold has provided an operating update for its Mineral Ridge Mine in Nevada. This open pit operation recommenced production in 2011 and the company is working to gradually increase output, along with opening new resource zones for mine development. The company reported sales of 8,125 ounces of gold and 4,843 ounces of silver for the year. In addition to current mine output, Scorpio is engaged in restacking remnant leach pad material to increase gold output. Efforts are also being directed towards generating optimum efficiency at the processing plant, where a recovery rate of approximately 65% of the contained gold has been achieved.

Yukon-Nevada Gold has completed a planned winterization and upgrading of its processing plant, and this week the company announced it had restarted mining operations at its Jerritt Canyon Mine in Nevada. The company has issued guidance targeting 9,000 ounces of gold output for this month, increasing to 12,500 ounces per month in March. Pending permitting approvals to increase the tonnage processed at the plant, the Yukon-Nevada hopes to ramp up to reach full processing capacity and realize even greater total gold production for the balance of the year.

On Wednesday, Yukon-Nevada announced a forward sale transaction for some of its gold production, with Deutshe Bank. The sizeable transaction represents nearly 28,000 ounces of gold, with a delivery requirement of 650 ounces per month spread out over a period of 43 months. Deutshe Bank will advance $20 million in an up-front payment as part of this deal, and thereafter will pay a sliding scale amount per ounce of gold delivered that is capped at an upper limit of $900 per ounce of gold, representing a maximum of $1565.56 per ounce of gold under the terms of this deal. Gold was trading at $1742 on the day the deal was announced, so it appears that the bank has locked in a bargain.

Silvercorp Metals reported financial results for the third quarter, highlighted by revenues of $61.9 million, an increase of 19% from the prior year generated on slightly higher total silver production. Net earnings however declined by 31% due to a number of factors including higher taxes paid out during the quarter. The company has also presented guidance for operations in 2012, projecting a strong increase in metals output. Silvercorp expects to produce a total of 6.7 million ounces of silver from all of its operating mines, representing an increase of 20% over 2011. Gold production amounts to a smaller percentage relative to the total metals output for the company, but it too is projected to increase, by 90% from the prior year, while lead and zinc will increase by 12% and 63% respectively. This surge in production will in part be accomplished through the development of new mines scheduled to commence operations during the year. The company has budgeted nearly $90 million in capital expenditures as part of this growth plan.

In Mexico, junior explorer Westminster Resources has reported signing a letter of intent to form a joint venture arrangement with mid-tier copper producer Capstone Mining for its Cumbral-San Bartalo Property in Sonora. Capstone may earn up to a 70% interest in the project by completing at least $9.3 million in staged expenditures to advance development at this large property. This is a significant deal in terms of the dollar value, but even more so when one considers that the market capitalization of Westminster is only slightly higher than the value of this transaction. The property has yielded many indications that a very large polymetallic system may be present, but the issue for many smaller juniors is finding the cash to properly explore and outline a big deposit. Capstone Mining is an ideal partner as the company has proven successful to explore similar systems, has the cash to fund its share of the earn-in, and also has demonstrated it can continue on through project development to the mining stage if warranted. There are many other juniors in similar circumstances to Westminster that may find the announcement of this deal very encouraging as they too look for suitable partners will to commit a large exploration budget to advance a project.

Another Mexico junior, Cream Minerals, has reported a new discovery at its Nuevo Milenio Project. Several deeper diamond drill holes intersected zones of quartz alteration, breccias, and stock work associated with a fault structure. This represents a ‘blind discovery’ in that it is overlain by unmineralized overburden material. Numerous intervals of a meter or more have been intersected bearing silver-gold alteration, within a zone of 76 meters. The drilling work will add to the resources of this project that are already established at more than 40 million ounces of silver from prior exploration.

Richmont Mines has reported some promising new gold intervals from its drilling program at the Island Gold Mine, near Wawa, Ontario. This round of drilling extended below the existing gold resource of the project, and encountered four new gold zones below 500 meters. A total of 25 drill holes have been completed in this program so far. Several high grade gold sections were reported, including 5.88 meters grading 27.26 g/t, and a 6.58 meter interval grading 22.08 g/t gold. A lateral strike of 150 meters has been defined so far, and Richmont plans to follow up with additional drilling to outline the extent of these deeper resource zones. The Island Gold Mine has a current compliant resource of nearly 500,000 ounces of gold in all categories.

In the Kirkland Lake gold camp, Queenston Mining has achieved some excellent gold results in their ongoing drill program on their Upper Beaver Project. A large zone has been defined near surface and extending down to depths of 300 meters, with multiple layers of high grade gold and copper mineralization related to porphyry style alteration. Significant intervals included a 10 meter core length bearing 42.2 g/t gold, and in another hole a 6 meter section grading 28.5 g/t gold. Defined resources at Upper Beaver amount to 690,000 ounces of gold, plus associated copper, and this is sure to increase when the latest drill data is incorporated into an updated estimate. Queenston Mining is well funded, and one of the most active junior explorers in Canada.

Staff Writer