The restarted Elk gold mine in British Columbia has delivered its first ore to New Gold's New Afton mine in Kamloops.
Gold Mountain, which restarted the mine, will deliver 70,000 tonnes of ore to the New Afton mine for processing. The Ore Purchase Agreement will last for three years.
In June 2021, Gold Mountain and New Gold signed a letter of intent to increase tonnage deliveries to New Gold to 350,000 tonnes per annum starting in year four.
Each truck that leaves the Elk gold mine is weighed on site to confirm the weight of the ore delivered, while gold and silver prices are determined on the monthly average of the London Bullion Market Association for gold. Silver prices are based on monthly prices at the London Metals Exchange.
The arrangement eliminates the need for a mill and tailings storage facility, reducing environmental impacts. Gold Mountain estimates it reduces carbon emissions by 11,500 tonnes per annum, power consumption by 10.2 MWh per year, and annual consumption by over 14 million litres.
Mining at Elk is focused on the 1300 vein near historic Pit 2. This pit was last mined from 2012 to 2014, with an average grade of 16.7 g/t of gold.
Gold Mountain will continue to explore its 21,187-hectare land package, and is working on its Siwash North zone for expansion.
The Elk gold mine was acquired by Canadian gold explorer and miner Bayshore Metals for C$10 million in May 2019. Gold Mountain acquired the mine in August 2020 in a reverse takeover deal.