New Gold’s Blackwater Project is still on target, but metal prices have left the construction date in limbo.
The new Community Manager for the proposed gold mine, Claudette Gouger, updated mayor and council on Mar. 12.
Gouger said the results of the feasibility study which came out last December and led to the deferral of the Blackwater project in favour of the Rainy River Project, a proposed gold mine near Fort Frances in Ontario, are due of lower gold prices and a lower exchange rate.
However, she also said Blackwater “still remains a flagship for the company, just because the size of the deposit is so large.”
She said while Blackwater will still be a priority for the company, because the Rainy River Project is further along in the development process and will cost about half of what Blackwater would to build and would therefore have a faster rate of return on investment, it will take priority for construction.
The Rainy River Project will cost an estimated $900 million to build, while the Blackwater Project would be around $1.85 billion.
“The idea is to get Rainy River up and running and have those assets in to the company and then looking at and moving those forward to be able to develop Blackwater,” said Gouger.
The biggest fluctuation in terms of the project’s feasibility over time has been the price of gold, so the company wants to continue to move the project through the permitting process but will wait for the price of gold to rebound to begin the construction phase.
At this point the project still is on the original planned timelines and with environmental assessment and exploration continuing as planned in 2014.
Exploration will begin again in the spring, with 23,000 hectares in new acquisitions in the area which the company will drill more thoroughly this year.
“So we’re still looking in our region,” said Gouger.
She said the delay in the project actually gives the team more time to work to build capacity in the communities and work with the College of New Caledonia.
She also said the hope is with Rainy River being developed first, the hope is the team which helped get Rainy River up and running will then be able to move over to help get Blackwater up and running as well.
“That’s our goal for this year is to continue to have the project going through the whole process, have it be shovel-ready and de-risking it, so that when gold prices rebound we’re able to take advantage of that and hit the ground running,” said Gouger.
The company aims to submit their plan for environmental approval within the first quarter of 2014.