BCGold Sells Bulk-Sample Gold for Essential Cashflow
By Kevin Michael Grace
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“In this business, you have to have a lot of irons in the fire,” declares BCGold TSXV:BCG President/CEO Brian Fowler. “I joked at the initial stages of BCGold when we acquired Engineer that I always looked at it as our Armageddon property. That is, if the world goes to hell in a hand basket, which it’s well on its way to right now, that I felt strongly even then that we’d be able to somehow produce a product; if we had a mine and mill, we could do that.”
Fowler’s jest is now a reality. The Engineer Mine property comprises 2,200 hectares located 32 kilometres west of Atlin, BC, on the south arm of Tagish Lake. Before it ceased production 70 years ago, it yielded more than 560 kilograms of gold and 278 kilograms of silver. Its grades were high—39 grams per tonne gold and 20 g/t silver—and it is that quality that has now become central to financing BCGold‘s continued operations throughout BC and the Yukon.
BCGold owns 75% of Engineer and expects to earn the rest by 2013. It has a 2011 43-101 inferred resource of 41,000 tonnes grading 19 grams per tonne gold for 25,000 contained ounces. It is permitted to mill up to 4,000 tonnes of bulk sample material in 2012. On June 26, BCGold announced its first sale of gold concentrate from Engineer: US$107,000 realized from 67.9 ounces at US$1,608 per ounce recovered from 0.8 dry metric tonnes produced during its 2011 bulk-sampling program.
Fowler says, “We acquired it in 2006, and we’ve got $4 million in expenditures to date. This past year we spent $1.1 million on the property. We ended up milling about 246 tonnes of material and demonstrated that we got a mining headgrade from this material of 16.9 g/t gold. We’re pretty pleased with the results. I think we demonstrated that we can develop a marketable product at Engineer easily. We think with some mill modifications we’ll be able to process larger sample blocks from the underground to generate a fairly significant revenue stream.”
Last week, BCGold set forth a program to do just that. On July 9, it announced $550,000 worth of exploration and development for 2012. The Level 5 shaft area will be refurbished, and Levels 6 and 7 of the mine will be dewatered to access the down-plunge extension of two gold shoots, concurrent with soil sampling, mapping and prospecting of the entire property. On July 10, it announced a non-brokered private placement of $500,000 (10 million units at $0.05 of one share and one-half of a warrant). This tops up the $750,000 already available from previous-flow financing and will enable exploration of the company’s Off-White and South Quesnel properties.
We think with some [Engineer Mine] mill modifications we’ll be able to process larger sample blocks from the underground to generate a fairly significant revenue stream —Brian Fowler
For all the attention paid to Engineer Mine of late, it is but one of BCGold‘s two dozen properties. “We’re a junior company focused in copper and gold exploration,” Fowler explains. “We’ve been active since 2006, and we concentrate in areas that are historic, current or emerging mining districts. The best place to find a mine is near one that’s in production or was in production or going into production. We try to acquire projects that are conceptual or early stage and advance them towards resource development.”
Engineer is the one property that produces invaluable cashflow. Fowler reports, “Engineer can sustain, in our estimation, a small 30-tonne-per-day operation for up to 10 years. But it’s not just about the narrow-vein high-grade; there are some very large sheer structures going through the property. That was our focus in 2006, and we got some very encouraging results but not good enough to warrant follow up at that time. But with gold prices how they are now, that’s the carrot at Engineer that keeps us going.”
BCGold‘s non-Engineer projects are clustered around “best places.” Its South Quesnel properties are close to New Gold’s TSX:NGD New Afton Mine, which went into production last month with 2012 guidance of 35,000 to 45,000 gold ounces and 30 million to 35 million pounds of copper, Teck’s TSX:TCK.B Highland Valley Mine, which is expected to produce copper and molybdenum through to 2025 and KGHM’s Ajax copper-gold mine, which is scheduled for production in 2015.
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