“The history of the property goes this way: it used to be owned by three individual parties. One called Teck Corona—they found it and then of course gold prices went off the edge so they didn’t go any further. Then, on the down dip portion, a company called Laramide owned that. And on the up dip portion there was a local owner who owned the surface rights which we’ve just purchased, and we’re closing on that March 31. So we’ve now just consolidated the whole project. We paid $18 million in cash for it to Corona and also gave them about another $7 million in shares.
“The company floundered for awhile. But now, I’ve put a team together with Andrew Cheatle—who’s a VP Exploration up there now—and Greg Ferron. That’s where the opportunity’s come, because we’ve changed the whole management and direction of the company. Cheatle is a former Chief Geologist for the Musselwhite Mine and he’s very good. For the first time we’ve got a guy that’s come on staff and he’s 100% on the project. And we’re starting to really understand the whole geology of the deposit, the way it’s dipping and trending, for the first time. Before this it was just consultants. Now we’ve got our own full time, top geological staff. Which leads to way better targetting, which is now providing us with a higher quality of result. We’re starting to see a consistent array of thicker widths. That’s been the real change in the project.
“The resource estimate was done last year, and it was 1.2 million ounces, about 80% of which is in the inferred category. The change in management has allowed the company to get properly positioned in the capital markets. We’re properly funded now. We just closed another $6 million about a week ago. And we have two rigs drilling on the project for the first time. So we’re really starting to move this thing along.
“For sure the plan is for Treasury to take it to production. It’s a project that Treasury can afford to do. We did a preliminary economic study last year and that returned pretty healthy numbers. The capex was around about $47 million to build it. And that was looking at a production scenario of 75,000 to 100,000 ounces a year. So it’s a project that is well inside the limits of a junior project like ours to build and finance. The job now is to get back in and get that inferred resource into the indicated categories, then come back and do the feasibility again on those numbers and see what we come up with. These thicker widths that we’re getting are increasing. They’re going to be very important when we put a new resource together.
“We’re a third of the way through a 20,000-metre drill program. We’re meant to have that completed, I would think, in the next two to three months. So, we’re looking at fall 2011 to get a new resource. Then we’ll follow that up with some sort of feasibility to be completed on the back of that this year. And we’ve got things like the baseline and environmental studies already underway, as well as metallurgical samples. We just hired a very good metallurgist. So all those things are running in the background.
“When we first joined in December we were a little worried because it’s all in the inferred categories. But the drilling has certainly come back without any surprises. If anything it’s getting better. It looks like we’ve got a very good project here. My gut feeling right now is that the project is looking pretty positive. There’s a lot of hard work to be done, but we’re getting the job done.”
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