Sona Plans Q3 2013 BC Gold Production
By Ted Niles
“Our goal is to be in production by the third quarter of 2013,” says Nick Ferris of his Blackdome-Elizabeth gold project in BC. The Executive Chairman of Sona Resources characterizes it as advanced exploration but adds, “We’re on a double-track. One, to move the resource from inferred to measured and indicated, so we can complete a prefeasibility study. Two, to expand the resource as fast as we can.”
Located about 200 kilometres north of Vancouver in the Lillooet Mining District, the Blackdome Gold Mine and Elizabeth Gold Property comprise 196 square kilometres and 124 square kilometres respectively. The 30 kilometres between them is bridged by a permitted connector road. Blackdome is a former producing mine—yielding 225,000 ounces gold between 1986 and 1989—with a current resource estimate of 52,600 ounces gold indicated and 25,900 ounces inferred. However, it is Blackdome’s fully permitted, 300-tonne-per-day mill that really excites Ferris. “It’s in excellent shape,” he says, “and could be ready for production in about four months’ time at a cost of about $2 million. And we’re starting up under the Mines Act in BC, so we don’t have to go through an environmental review.”
Ferris believes Sona’s “real potential” is at Elizabeth. It was explored extensively before Sona bought it in 2002. And it’s in a good neighbourhood, 25 kilometres north of the Bralorne camp, which produced over four million ounces of gold between 1921 and 1971. According to Ferris, “Elizabeth has pretty much the same geological setting and mineralization type. It has never been mined, and it’s completely wide open.”
Elizabeth currently has an inferred resource estimate of 206,000 ounces gold. Ferris cautions, however, “That was calculated in 2009 and does not include a number of drill intercepts from last year, some of which were really spectacular results. The resource, theoretically, is a bit bigger than that. We think we can increase it fairly rapidly and, as we begin our underground development, it will grow even faster.”
March 30 assays from Elizabeth include 134.9 grams per tonne over 0.9 metres, 12.5 g/t over 2.5 metres, 57.5 g/t over 0.8 metres, 10.6 g/t over 1 metre, 6.5 g/t over 6.7 metres, 19 g/t over 1.5 metres, 109.5 g/t over 2.5 metres, 42.5 g/t over 1 metre and 77.9 g/t over 5.1 metres. Assays of October 2010 include 17.4 g/t gold over 1.5 metres, 96.4 g/t over 2.5 metres, 85.4 g/t over 4 metres, 134.9 g/t over 0.9 metres, 12.5 g/t over 2.5 metres and 17.4 g/t over 1.5 metres.
Sona’s plan is to move Blackdome-Elizabeth to production as soon as possible in order to generate the necessary revenue to expand the company’s resources and increase mill feed thereby. Once Blackdome-Elizabeth begins generating cash flow, Sona will “really spend some money on exploration,” including on its Montgolfier project in Quebec—40 kilometres east of Aurizon’s Casa Berardi Mine—which Sona has kept on hold since 2008.
We’re starting up under the Mines Act in BC, so we don’t have to go through an environmental review – Nick Ferris
A 2010 preliminary economic assessment forecast a base-case eight-year mine life for Blackdome Elizabeth, producing 24,000 ounces annually. According to Ferris, “The capital cost is about $21 million, which would get paid off in a little over a year at current gold prices.” Ore would come both locally from Blackdome and by truck from Elizabeth. Ferris says, “As we find more resources at Blackdome we will increase the throughput to 300 tonnes a day and produce about 33,000 to 35,000 ounces a year.”
Sona has begun a 4,500-metre underground drilling program at Elizabeth, which will be followed by another 3,000 metres of surface drilling there and then 5,000 metres of surface drilling at Blackdome. “The first resource recalculation won’t be done until December of this year,” Ferris says. “Probably second quarter of next year for prefeasibility, and probably shortly thereafter we’ll be doing production decisions.”
Should the right offer come along, Ferris doesn’t dismiss the possibility of accepting it, but he concludes, “Longer term, as the resource grows and the properties double the capacity, we’d like to become an intermediate producer and a very aggressive exploration company.”
Sona Resources has $2.7 million cash on hand and 22 million shares outstanding. Shares currently trade at $1, halfway between the 52-week high of $1.65 and the 52-week low of $0.44.