Nova Scotia’s gold revival

Peggy’s Cove lighthouse.

Nova Scotia is Canada’s second smallest province and not one that immediately comes to mind as a top gold mining jurisdiction. But companies that are investigating historic gold production in the region are finding new potential. Here’s a look at three of them.

Atlantic Gold

Atlantic Gold’s Moose River Consolidated gold mine. CREDIT: ATLANTIC GOLD

Atlantic Gold has been active in Nova Scotia since 2014. Early this year, after only four years advancing its Moose River Consolidated (MRC) project, the company declared commercial production at the mine – its first.

MRC is forecast to produce an average of 87,000 oz. gold per year over 8.5 years at an AISC of $690 per oz. based on production from two of four deposits at the property – Touquoy and Beaver Dam.

But a prefeasibility study on a second phase expansion of the mine shows that the Fifteen Mile Stream and Cochrane Hill satellite deposits can be brought into the mine plan for a staged capital investment of $396 million. The study, released earlier this year, shows the satellite deposits will boost the mine life to 10 years and increase production as high as 200,000 oz. gold per year during peak years while maintaining a low AISC of $692 per oz. gold.

The study pegs the expansion project’s post-tax net present value (NPV) at $188 million, assuming US$1,300 per oz. gold and a 5% discount rate.

Stage 1 production is based on proven and probable reserves in Touquoy and Beaver Dam totalling 760,000 oz. in 16.5 million tonnes grading 1.44 g/t gold. Stage 2 production would be based on adding reserves totalling 825,000 oz. in 22 million tonnes grading 1.17 gram per tonne from Fifteen Mile Stream and Cochrane Hill.

Further drilling is under way on the satellite deposits with an updated resource due out before the end of the year.

MRC is located in central Nova Scotia, about 60 km northeast of Halifax. First production at the property dates back to the late 1870s. Whereas historic production was based on highgrade veins, Atlantic is targeting disseminated mineralization amenable to low cost, open pit mining.

Anaconda Mining

Anaconda Mining’s Goldboro project. CREDIT ANACONDA MINING

Anaconda Mining, which operates the small Point Rousse gold mine in Newfoundland, acquired the Goldboro project in Nova Scotia in 2017 from Orex Exploration.

Earlier this year, it released a preliminary economic assessment (PEA) outlining an open pit and underground mine at Goldboro that would produce an average of 42,000 oz. gold a year over an 8.8-year mine life. Capital costs were estimated at $89 million (including a $20 million contingency). Concentrate produced at Goldboro would be shipped to the company’s Pine Cove mill in Newfoundland for gold recovery. Goldboro is located on tidewater in the Eastern Goldfields of Guysborough Cty., 185 km northeast of Halifax.

The recent PEA was based on measured and indicated resources of 102,500 oz. gold in 1.1 million tonnes grading 3.01 g/t gold (open pit) and 422,900 oz. in 2.6 million tonnes grading 5.09 g/t gold (underground).

In August, Anaconda received permits to take a 10,000- tonne underground bulk sample from Goldboro. Extraction of the sample, which is expected to take four months, will use an existing decline excavated in the late 1980s. The sample will inform a feasibility study planned to begin in September.

Past production at the Boston Richardson mine on the property dates back to the 1890s.

Resource Capital Gold

Resource Capital Gold’s Dufferin gold project.
CREDIT: RESOURCE CAPITAL GOLD

Resource Capital Gold completed a 45,600-tonne bulk sample at its Dufferin project in southeastern Nova Scotia this summer.

Taken over a 14-month period from four different “saddles” at the saddle reef vein system, 5,846 oz. of gold were recovered from the sample for a grade of 4.17 g/t gold. Gold recoveries averaged 80.9%.

The site contains a fully permitted 300 tpd gravity and flotation mill, which was used for test milling. It was built by a previous owner who briefly brought the mine into production in 2014.

The vein system at Dufferin has been defined over 1.4 km and to 400 metres depth, with 14 different saddle reef veins identified. The project is located 25 km from Sheet Harbour in southeastern Nova Scotia, about 135 km northeast of Halifax.

Dufferin contains an indicated resource of 58,000 oz. gold in 151,500 tonnes grading 11.9 g/t gold and an inferred resource of 150,000 oz. gold in 703,900 tonnes grading 6.6 g/t gold.

A 2016 PEA projected that 216,000 oz. of gold could be recovered over a 10-year life at Dufferin with a capex of $9.85 million, a post-tax NPV of $89.2 million and an IRR of 121%.

Resource Capital says that moving forward, its exploration focus will be on the Tangier and Forest Hill projects, two other past producers in the province that it is advancing toward PEAs.