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New owners for Lupin gold mine
Northern News Services
Published Monday, July 18, 2011
Toronto-based Elgin Mining Inc. announced its acquisition of the Lupin property on July 8, along with the Ulu gold deposit to the north.
"We think there is an excellent opportunity here to reopen and develop the Lupin mine," Patrick Downey, president and CEO of Elgin Mining, said.
"Lupin was a very successful gold producer in the '80s and '90s and with all the exploration going on in that region, we see a great opportunity here to go back in and hopefully find additional resources."
More than 3.3 million ounces of gold were produced at the Lupin mine intermittently between 1982 and 2005, when Kinross Gold Corp. stopped production due to low gold prices.
As the price of gold climbed, expressions of interest were sought for the purchase of Lupin and sister gold deposit, Ulu.
Elgin Mining, formerly called Phoenix Coal Inc., was "sitting on a lot of cash" and looking at several mineral resource opportunities, Downey said, adding "Lupin was the most compelling one."
Elgin entered an acquisition agreement with MMG Resources Inc. and Bonito Capital Corp. to acquire indirectly Lupin and Ulu, paying just more than $4.8 million in cash in addition to a common share agreement. Elgin also replaced about $27 million in reclamation bonds with the Government of Canada as security for the reclamation liability of both properties.
The company has about $13 million left available to fund activities at Lupin, and plans to begin drilling at the site in the fall, Downey said. Lupin, which is comprised of five mineral leases stretching about 68 square kilometres, comes with infrastructure including a 2,300-tonne-per-day plant, and all-year camp facilities.
The Hamlet of Gjoa Haven interim economic development officer Joseph Aglukkaq says the return of the Lupin gold mine to operation is exciting for the Kitikmeot region.
"It's welcome news," Aglukkaq said, anticipating greater employment opportunities for the people of the region. "We are battling poverty and social issues, we need all the employment we can get."
Aglukkaq said no one from Gjoa Haven was employed by Lupin in the past, as the former operators of the mine hired from hamlets closer to the site in Kugluktuk and Cambridge Bay.
Downey said the company will be working with a very focused team getting started this year and hopes to fill out exploration efforts and more staff in 2012, a time when they also hope to begin a drill
program at Ulu.
The Ulu property, located about 155 kilometres north of Lupin, has an estimated 751,000 tonnes of indicated mineral resources, grading 11.37 grams per tonne, Elgin says.
Lupin is located about 285 kilometres southeast of Kugluktuk.
Shares of Toronto-based Elgin Mining closed at $1.75 Thursday on the TSX-V.