Cross lake gets permit to reopen QR gold mine

Vancouver – Cross Lake Minerals (CRN-T, CLKMF-O) is gearing up to restart its QR gold mine this summer after having an amended permit application approved by British Columbia’s Ministry of Energy, Mines and Petroleum Resources.

The Vancouver company says it will rank as the only gold mine in B.C. to operate with a cyanide mill, meaning that dore gold bars will be produced on site.

“The receipt of this application is the last major hurdle that the company had to overcome to allow for smooth transition to operations at the QR mine,” said Cross Lake chief executive officer Gordon Keevil.

Located south of Quesnel in central B.C.’s Cariboo-Chilcotin region, QR went into production in 1995, but shut down three years later due to low gold prices and a change in the strategy of former owner Kinross Gold (K-T, KGC-N).

At the time of the closure, gold was trading below US$300 an oz, making Cross Lake’s decision to acquire the mine from Kinross in 2004, a bet on higher bullion prices.

Now that gold is trading at over twice that level at US$632, Mr. Keevil said he is confident that the planned 30,000 oz-per-year operation will be highly profitable. “I’m very excited and enthusiastic about this going back into production,” he said.

In keeping with that plan, the company has installed a 42-man camp at the site, begun the rehabilitation of the electrical distribution system, and completed detailed engineering studies of the tailings containment area.

The installation of a 29 kilometre power line means the cost of producing electricity will be significantly lower than in the days when Kinross used on-site diesel generators to keep the lights on. Mr. Keevil said plans to restart production this summer now depend on the power line being completed.

Meanwhile, plans to start QR are based on 85,000 oz. of mineable gold reserves, grading 3-7 grams per tonne. Since the ore is located in skarn type deposits, grades tend to vary considerably.

Cross Lake has indicated that initial production will come from the three zones the North, Northwest, and Midwest It said the North zone is a faulted extension of the Main zone, which has a strike length of 300 metres and produce over 100,000 oz gold.

Once the mine is back in production, Cross Lake will turn its attention to another former gold producer the Porcher Island which is located about 35 kilometres southwest of the B.C. port city of Prince Rupert.

Cross Lake said the delineation of a mineable resource at Porcher Island would provide an excellent complement to QR.

It said the surface facilities at the QR, including the 1000 tonne-per-day mill, can be utilized to maximize the potential of both properties.