Mining is officially underway over at Gold Mountain Mining (TSXV: GMTN) in just a week after receiving its permit from the BC government. The company this morning announced it has mined its first significant mineralized material at its Elk Gold Project.
Mining has begun of the 1100 vein system within pit 2, which was last mined in 2012 at a grade of 16.60 g/t gold. Mineralized material will now be crushed, weighed, and assayed before being sent off to its processing partner New Gold.
The firm indicated this morning that the transition to full scale mining operations came in under the $9.0 million capital budget as a result of existing infrastructure on site. Payback period is expected to be shortened to six months as a result, with the firm expecting to generate $10.0 million in after tax profits in the first year of operations.
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“First mineralization along our 1100 vein in Siwash North marks the Company’s transition from development into commercial production. By completing our waste rock stripping and site preparation in parallel to our work with Indigenous Communities and Provincial Regulators on our permitting, we have been able to maintain our timelines of delivering material to New Afton and recognizing revenue in Q4 2021,” commented Kevin Smith, CEO of Gold Mountain.
The company expects to continue to ramp operations as it targets the 1100 and 1300 vein systems on its path to recognizing revenues in the current quarter. Payments for crushed ore are expected to be made monthly under the current purchase agreement.
Gold Mountain Mining last traded at $1.91 on the TSX Venture.
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