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DOING SOME DIGGING Gold Price Paves Way for St Andrew’s Mine Openings

Everyone likes to watch the gold price rise. Early this morning (Feb.18) the price was US$415.50. It has been stead...



Everyone likes to watch the gold price rise. Early this morning (Feb.18) the price was US$415.50. It has been steadily climbing for the past year, and we hope this is only the beginning. A strong gold price will bring more production on line, notably from Toronto’s ST ANDREW GOLDFIELDS.

This junior company has no producing properties now. It owns the closed Stock mine and mill, and the Hislop and Taylor mines near Timmins, Ont. It also owns the closed Nixon Fork mine near McGrath, Alaska. St Andrew will reopen two of the mines within a year, and the company expects to be a 200,000-oz/year gold producer within the next two or three years.

I own no mining stocks, but I do see press releases from hundreds of gold mining companies, exploration plays, and would-be producers. For some reason those from St Andrew have stuck in my mind.

In September 2003, the company released a technical report on reopening Nixon Fork, followed a month later by a similar study for the Stock mine. Those reports are two reasons I have kept an ear to the ground for news.

Another reason for my interest is that St Andrew has already raised the cash it needs to complete these projects. In August 2003 it raised $5.9 million, and in November another $10 million. Those sums went into exploration and advanced exploration. Since the beginning of this year, the company has raised close to another $20 million with which to redevelop the Stock and Nixon Fork properties. The Stock mine and mill will be back in production during the third quarter of 2004 pouring about 150,000 oz of gold annually. The Nixon Fork mine will begin producing around the same time at a planned rate of 50,000 oz/year. Once those two mines are up and running, St Andrew will make a decision on reopening the Taylor gold mine (another potential 50,000-oz/year operation).

Why has St Andrew been so successful in raising capital? Company controller and secretary Bruce Ramsden gives the credit to his boss: "Glenn Laing [president and CEO] is good at raising money. He does his homework and puts together a sound business plan. Our investors have faith in our plans. "And," he allowed, "the rising price of gold helps us, and helps everyone."

It also helps that St Andrew has all the ingredients for successmoney, reserves and hard assets. The plants, mine workings and infrastructure are already there. Money goes further reopening a former producer than it would developing a new mine from scratch.

St Andrew won’t be the only new gold producer in the near future, but it is one that looks to be solidly positioned for success. We at CMJ will continue to look for positive news from it and other junior gold companies.


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