Construction has begun on a new heap leach facility at Rye Patch Gold Corp.’s Florida Canyon Mine in Nevada, a move that Dundee Capital Markets’ analyst Ron Stewart believes could add value for investors over both the long and short terms.
Rye Patch Gold Corp. (RPM:TSX.V; RPMGF:OTCQX) announced the construction start in an Aug. 29 press release. Since completing the Florida Canyon mine purchase on July 29, the company states it has “crushed the under-liner material for the South Heap Leach facility; prepared the primary crusher for the move from the Standard Gold mine located 6 kilometres to the south to its new home adjacent to the South Heap Leach facility; completed maintenance on the mining fleet; and is now breaking ground for the ponds and pad of the South Heap Leach facility.”
“We believe RPM offers a compelling value creation opportunity over the next 6 to 12 months as they initiate production and join the junior producer ranks.” Stewart wrote in an Aug. 30 research report. “Looking further out, we see excellent potential for the company to extend the mine life and expand the operation to over 100K oz/a within the next three to four years.”
According to the Rye Patch release, the fully permitted Florida Canyon mine “has been in continuous production since 1986.” The company goes on to state, “[a] total of 63.81Mtons (58Mtonnes) of ore is planned to be mined over an 8-year period. An estimated average recovery of 71.1% would yield 602,000 ounces of gold over the life of mine.”
In addition, the company “expects Initial production from the South Heap Leach facility to occur in the fourth quarter of 2016 and anticipates achieving commercial production from the new leach pad by the second quarter of 2017.”
According to Stewart, Dundee’s model “suggests Florida …read more