With plans to have a mine and associated gold-processing plant operating by the end of 2015 at its Rainy River Gold Project north of Barwick, Rainy River Resources will be busy in the new year.
Garett Macdonald, the company’s vice-president of operations, and Kyle Stanfield, director of environment and sustainability, gave a presentation to share their upcoming plans during a luncheon hosted by the Fort Frances Chamber of Commerce on Monday afternoon at The Adventure Inn.
Having recently received positive results from the latest Preliminary Economic Assessment (PEA) of the gold resource at the site, Rainy River Resources is working towards constructing a combined open pit and underground operation, with an average annual production of 330,000 ounces of gold and 500,000 ounce of silver over a mine life of 13.2 years.
The company, which has been doing exploration drilling for several years now, will be initiating the mine environmental assessment and permitting process in the first quarter of 2012, followed by a feasibility study beginning in the second quarter of the year.
Macdonald noted Rainy River Resources then will place orders for long lead major equipment in the third quarter, with the feasibility study being completed in the fourth quarter.
They also expected to complete project financing by the end of next year.
“Over the next 12 months, Rainy River will advance the project significantly,” Macdonald said, noting the focus will be on completing the feasibility study to tighten the accuracy of the mine plan and construction cost estimates.
“The feasibility study is a key milestone to secure full project financing, which is what we want so we can get the project underway,” he added.
The permitting stage is estimated to take about two years, with a two-year construction period expected to begin early in 2014.
It’s hoped the mine will be operational by the end of 2015.
Macdonald said construction would include installing power lines, moving roads, and building facilities, as well as the mine itself.
He added pre-production capital expenses are estimated to be $680 million, and the company is focused on paying back investors within three-and-a-half years.
“We will also have on-site refining to gold dore bars,” Macdonald said, noting the plan includes the provision for progressive reclamation of the site to ensure productivity of the land long after the mine closes.
The pair said an operational mine would bring plenty of opportunity to the district, including Fort Frances.
Macdonald indicated during the construction phase, for instance, a peak workforce of 675 people is required.
The operating phase, meanwhile, would see employment levels vary according to production, but would average 618 people over the life of the project.
“Being 65 km from Fort Frances, we want people to drive or be bused to and from work,” Macdonald remarked, noting there will not be a camp at the site.
“There is a good quality of life here and I think we can attract people here,” added Stanfield.
“They will bring their families and be able to home with them in the evening.”
Stanfield also noted the company is working closely with the Confederation College campus here to develop programs for local people to receive the training and skills needed to work in the mine.
He added they also will be speaking to students at Fort Frances High School to help youth understand the opportunities that may be available here in the near future.
Still, as the pair offered much optimism for the future of mining in the district, Macdonald conceded there is always a risk, as with anything, as the process moves ahead.
“It depends on the gold prices at the time, but there is clearly a strong projection,” he noted.
And Macdonald stressed the Rainy River Gold Project is unique in its location to power and rail, infrastructure, and security.
Following the presentation, Fort Frances Mayor Roy Avis noted the project sounds very interesting.
“There is a future for mining in the district and we should support their endeavour,” he remarked.