Who's Digging Greenwood?
BY: BG EDITOR
Jul 03, GREENWOOD, BC (BG)
Given the abundant historical record of mining in Greenwood, which is brought to life by many wonderful photographs preserved from the turn of the century, it's easy to think of the Greenwood mining industry as a thing of the past. But in fact, mining is alive and well.
We're all familiar with the trickle-down effect of commodities pricing. If it's a banner year for apples, prices drop for the consumer. When orchards are hit with a late freeze and crops are damaged, prices can skyrocket. We've heard it recently, in news reports about depleted oil inventories at the refineries due to the Fort Mac fires, which pushed up prices at the gas pumps. The same holds true for the metals, like copper and gold.
Just prior to the 2008 financial crash, gold was at a low of approximately $570 USD/oz. Although prices came up during the crisis phase as investors protected their wealth by moving to gold, by late 2008 prices were only at $750 USD/oz. Compare this to today's price of around $1,336 USD/oz.
It was at the point of the 2008 lows that one local gold mining company moth-balled their Greenwood operation. Huakan International Mining, headquartered in Vancouver and Tianjin, China, had been actively operating their Greenwood Project at the Lexington-Grenoble site, between Greenwood and Grand Forks.
The Greenwood Gold Project was comprised of Huakan's underground Lexington gold-copper mine as well as the Golden Crown high grade gold-copper deposit site, and a modern 200 tonne/day gravity-flotation mill and tailings facility.
The project had been fast-tracked to construction and trial mining between September 2007 and May 2008, and a skilled local work force was engaged on site. The Lexington mine and mill operated for only 8 months, however, before Huakan suspended operations due to low gold prices.
While the 2008 gold market was at $750/oz., operating costs for the mining company were around $US850/oz. This $100/oz. deficit caused Huakan to move the Greenwood operation to a care-and-maintenance phase. But with an estimated 2 years of mine life remaining, there was good cause to expect that the Greenwood project should get a new lease on life. Huakan, meanwhile, continued operation of its various BC mining projects, including the Caramelia Gold property, a 500-hectare operation located 30 km. west of Greenwood on Highway 3.
On April 7th, 2016 Golden Dawn Minerals Inc. (TSX-V: GOM; FRANKFURT: 3G8A) announced a private equity deal for their option to acquire Huakan's Greenwood mining operation. Project equity totals CDN $9,600,000, which includes both the acquisition costs of (cash) CDN $3,345,000 and CDN $ 6,245,000 and the working capital needed to commence mining from the Lexington Mine and processing at the Greenwood Mill facilities within 6 months of the phased deal, at the end of June, 2016. Their website announced:
"Golden Dawn is consolidating its land position in the Greenwood Mining District by acquiring severely undervalued gold assets. Kinross Mining, the fifth largest gold mining company in the world, also sees opportunities in the Greenwood District and has recently acquired a major land position surrounding Golden Dawn.
Adding to its 100% owned May Mac mine and mill, Golden Dawn has acquired an option to purchase an additional two mines and mill in the immediate region: 1) the Lexington Gold Mine; 2) the Golden Crown Gold Mine; 3) The Greenwood Mill — 200 tpd capacity; and 4) all associated mining equipment".
On April 25th of this year, Golden Dawn reported that it had completed the second of this three phase deal: an option agreement with Huakan International Mining Inc. The debt financing agreement enables Golden Dawn to acquire from Huakan the Greenwood operation, consisting of a 200 t/day mill expandable to 400 t/d, all associated buildings, including a 400,000 tonne tailings facility, all real property and property rights, mineral claims comprising the Lexington-Grenoble and Golden Crown mines, all equipment, supplies, vehicles, permits, reports documents, and other associated assets.
On June 29th, Golden Dawn's CEO, Wolf Wiese, announced that it had received conditional approval from the TSX.V for the transaction to proceed. The assets summarized above are situated 10 k.m. south of the city of Greenwood and 15 k.m. from the Company's May-Mac Mine.
The deal will complete upon exercise of the option agreement, by or before August 6th of this year. As of July 1st, Golden Dawn took over funding of the care and maintenance costs of the mines and mill, advancing $30,000 CDN to the project while debenture financing is completed.
