Gold Resources Corp. will proceed with the development of its Isabella Pearl gold mine in Nevada following approvals from the U.S. Bureau of Land Management and the Nevada Department of Environmental Protection as well as its own board of directors.
The Colorado Springs, CO-based company announced it would begin building an openpit mine on property it controls in Nevada that will more than doubling its gold and silver production when operations begin next year.
The Colorado Springs Gazette reported that the positive Record of Decision of the Environmental Assessment was the final permit needed for the project in Mineral County, NV.
Gold Resource estimates the mine will produce 822 kg (29,000 oz) of gold in its first year, more than it expects to produce from its other mine in Mexico, and more than 1,133 kg/a (40,000 ozpy) for the following three years.
The company said Isabella Pearl probably has nearly 5.6 t (200,000 oz), an amount likely to grow after further exploration.
Gold Resource expects to spend $30 million to get the mine operating, including $10 million from cash and equipment financing already spent on a crusher, conveyors, a stacker and processing plant. Construction of the mine and processing facilities is expected to begin "as soon as possible" and take up to a year, the company said in a news release.
The company expects to finance much of the cost through its $28.6 million in cash and from cash flow generated by its Mexican mine, though it could sell stock or borrow to finance the project, which will be built and operated by a contractor it has hired but did not identify.
“This is an exciting milestone and time for Gold Resource Corporation shareholders and our Nevada Mining Unit,” Gold Resource chief executive officer Jason Reid said in the release. “We are currently in a strong cash position and focused on completing this project with cash and cash flow if possible. This goal will require metal prices and operations to continue as they have thus far this year.
“While we have other funding alternatives available if needed to help us overcome unforeseen challenges or metal price volatility, the Board of Directors and management of Gold Resource Corporation remain committed to shareholders and are moving forward with a goal to avoid or limit shareholder dilution to the extent possible.”