During the second quarter ended July 31, 2022, the company mined 7,101 tonnes of ore and delivered 557 ounces of gold. The company said ore mining was slowed during the quarter as the company implemented a number of initiatives which were designed to provide a better understanding of the orebody.
They include the completion of a 3,700-metre infill drill program (87 holes), and an evaluation of improved ore blasting designs and ore recovery practices.
The company also removed 599,425 tonnes of waste on the 1,605 and 1,595 benches with the goal of increasing the minimum bench width in the bottom pit, which allows for more efficient and selective ore mining.
“Since acquiring the project, management has made a concerted effort to get Elk back into production and into revenue generation,’’ said Gold Mountain chief operating officer Grant Carlson. “While we’re proud of moving from permit to production in less than 18 months, the operations team has experienced start-up challenges,’’ he said.
Carlson said the company completed the infill drill program to tighten the in-pit spatial data. The program will define the grade control model for the next six to 12 months. “The results to date have shown gold assays that align with the drill hole assays used to build the resource block model,’’ he said.
Gold Mountain is a B.C.-based gold and silver exploration and development company with a focus on resource expansion at the Elk gold project, a formerly producing mine located 57 kilometres from Merritt in south central B.C.
The company is the product of a business combination between Bayshore Minerals Inc. and Freeform Capital Partners Inc. that was completed in December, 2020. As part of the qualifying transaction, Freeform changed its name to Gold Mountain Mining.
The Elk project is a past producing mine with much of the required surface infrastructure still in place that is required to restart operations.
It is situated within the Similkameen Mining District and consists of 27 contiguous mineral claims and one mining lease covering 16,566 hectares.
The first ore shipment (announced in February 2022) was mined from Elk’s 1300 vein, located at the footwall of historic Pit 2 and marks the beginning of cash-flow and revenue generation for the company.
Under the terms of an ore purchase agreement (OPA), the company will deliver 70,000 tonnes of high-grade ore annually, or approximately 200 tonnes per day to New Gold Inc.’s (NGD-TSX, NYSE American) New Afton Mine in Kamloops, B.C., which is located 133 kilometres from the Elk mine.
The OPA has a term of three years and is effective upon the first ore delivery.
Gold Mountain generated $968,860 of revenue in the second quarter. Carlson said the company has received positive results from a phase three exploration program. The company anticipates that the results will have a positive impact on an updated resource estimate that is expected by the fourth quarter.
Meanwhile, on September 14, Gold Mountain shares closed at 29 cents and now trade in a 52-week range of $2.25 and 27 cents.