Richmont Mines (RIC-T) has acquired Aurizon Mines‘ (ARZ-T) half-interest in the suspended Beaufor gold mine in northwestern Quebec.
On closing, Aurizon received $1.65 million in cash.
The company retains a gold-indexed royalty on future production from the mine. It will receive a $5-per-oz. royalty on half of the first 220,000 oz. gold produced, if the prevailing gold price is between US$280 and US$300 per oz. If the price is US$300 per oz. or higher, the royalty will increase to $12.50 per oz.
When production from Beaufor exceeds 220,000 oz., Richmont will pay a royalty that ranges from $17 to $30 per oz., depending on the gold price. This will also be payable on 100% of any future production from the adjoining Perron property, which is included in the deal.
Richmont already had a stake in the underground mine through its 69.3% interest in Louvem Mines (LOV-M), which will retain its 50% stake in Beaufor.
As the new operator, Richmont plans to evaluate its options for reopening the mine, which was suspended by then operator Aurizon in August 2000, due to pillar-stability concerns. The mine has since been on care and maintenance.
An independent study has concluded that mining can safely resume at Beaufor with the installation of hydrostatic barricades to backfill certain near-surface stopes. The work would cost $4.5 million.
As part of the assessment, Beaufor’s proven and probable reserves were re-calculated at 1.1 million tons grading 0.22 oz. gold per ton, or 237,000 contained oz. gold.
The acquisition consolidates Richmont’s operations in Quebec, where the company already owns the Francoeur mine and the Camflo mill.
For its part, Aurizon says it is focusing on developing its major asset — the advanced-stage Casa Berardi gold project, also in northwestern Quebec. The company still owns half of the Sleeping Giant gold mine in Quebec. The remainder is held by Cambior (CBJ-T), the operator.
Be the first to comment on "Richmont closes Beaufor deal"