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With its sights set on more than doubling its resource base and gold production over the next few years, Bralorne Gold Mines (TSXV:BPM,OTCQX:BPMSF,FSE:GV7) is in the process of raising up to $7.5 million in a convertible debenture financing.
From 1928 to 1971, the Bralorne, Pioneer and King mines produced 4.15 million ounces of gold generated from two 500 ton per day mills. At today’s gold prices this production would be worth more than US$7 billion.
Production was halted in 1971 due to low gold prices but at that time the mines were never fully exploited or explored. In 2002 the three mines and the surrounding exploration area were consolidated into one company: Bralorne Pioneer Gold Mines. After changing names to Bralorne Gold Mines and rolling back shares 10-for-1 in 2004 the renewed corporation focused its efforts on putting the mine back into production. In April 2011, the company restarted test mining operations at the Bralorne complex and poured its first gold-silver doré bar in May of that year.
Current resources outlined at the mine weigh in at 154,750 tonnes averaging 9.11 g/t gold in the measured and indicated categories and 246,835 tonnes averaging 8.78 g/t gold in the inferred category. According to the Preliminary Economic Assessment (PEA) written by Beacon Hill Consultants and released late last year, that’s enough for about a six year mine life operating at 85 tpd (for the measured and indicated portion of the resource). If all of the inferred resources currently defined are upgraded then the mine life could be extended to 14 years.
Over the first full year of production (2012), the company milled about 27,546 tonnes at an average feed grade of 8.1 g/t gold. The total estimated gold production was 6,246 ounces, including 3,676 ounces from gravity concentration and 2,570 ounces of gold in 511 tonnes of flotation concentrate. The mill availability was 74% and the average throughput was 101.6 tonnes per day for the time operated.
Last year the company’s main objective was pre-production development of the BK-3 zone to define mineralized shoots and prepare for extraction. This was successful and test mining commenced on the BK3 zone in January 2013.
The 2012 PEA recommended that Bralorne Gold Mines spend $18.9 million to further develop the mine and define additional resources in order to warrant expanding the operation to 250 tons per day.
With this expansion program in mind Bralorne intends to raise a minimum of $5 million and up to a maximum of $7.5 million. This principal amount will mature 24 months from the Closing Date and accrue interest at 12.5% per year payable at the Maturity Date. The principal can be converted into Units at a rate of one Unit for every $0.975 of principal converted. Each unit consists of one share and half a warrant. One full warrant can be exercised at $1.35 to receive one share, provided it’s exercised within 30 months from the closing date. (Additional details of the financing can be found in the press release below).
This financing allows the Company to get started on its plans to increase production. Bralorne intends to spend the money delineating additional resources particularly in the area below the 800 level to the 1000 Level. The plan incorporates a number of activities including:
- The installation of a treatment facility to treat arsenic in water from underground openings;
- A pumping system to dewater the workings from 800L to 1000L;
- A ramp to the 1000L;
- Rehabilitation of a shaft;
- Rehabilitation of drifts and raises;
- An extensive exploration program from both surface and underground;
- Drifting and raising to outline resources.
Bralorne Gold Mines has worked diligently over the past few years to put its namesake mine back into production. According to the most recent PEA the average estimated life-of-mine cash costs per oz is about US$1000/oz gold which makes the project sensitive to fluctuations in gold price.
In order to increase production and improve the overall economics of the mine the company is still working to prove up resources as well as expand and rehabilitate mine workings. Towards this end, Bralorne Gold Mines has re-invested production revenue back into the mine and this additional $5 to $7.5 million cash infusion will go a long way towards achieving its expansion plans.
Bralorne Gold Mines Announces Private Placement
Bralorne Gold Mines Ltd. (TSXV:BPM,OTCQX:BPMSF,FWB:GV7) announced a private placement of secured convertible debentures for a minimum amount of $5,000,000 and up to a maximum amount of $7,500,000.
Read the full article: Bralorne Gold Mines Announces Private Placement
Bralorne Gold Mines Announces Results from Bralorne Mine Project
Bralorne Gold Mines Ltd. (TSXV:BPM,OTCQX:BPMSF,FWB:GV7) development drift results showed 63.6 metres grading 59 g/t gold over 0.9 metres in the upper BK-3 zone on its Bralorne mine project in British Columbia.
Read the full article: Bralorne Gold Mines Announces Results from Bralorne Mine Project
Thomas Schuster – Analyst Bio
With a degree in Geological Sciences from the University of Toronto, Thomas started his career in the 1990s as an exploration geologist in the famous Timmins mining camp in Northern Ontario. He then moved to Vancouver and took a position as staff Journalist at the well-known mining publication, The Northern Miner, reporting the merits and shortcomings of Canadian exploration and mining projects worldwide. This built a foundation for his later work as a Mining Analyst for the Toronto-based institutional investment firm, Fraser Mackenzie. Thomas is currently based in Vancouver working as an independent mining analyst.
Disclosure: No positions at time of writing.
Bralorne Gold Mines is a client of Dig Media. Dig Media was paid a fee for the creation and dissemination of this commentary.