Muscocho negotiates loan with Ontario government

The Ontario government is offering its support to the Magino gold mine near Wawa, Ont., by lending cash-strapped partners Muscocho Explorations (TSE) and McNellen Resources (TSE) $1 million.

Under a tentative agreement, the loan from the Northern Ontario Heritage Fund is repayable within two years and is designed to provide working capital to assist the operation, said Muscocho President Terry Flanagan. The only surviving gold mine in the Wawa area, the high-cost Magino operation produced 22,559 oz. in the first nine months of this year at an average rate of 646 tons per day.

While Flanagan said the loan would enable Muscocho to improve efficiencies at Magino, he declined to say how much mine operating costs have changed since last year when costs averaged $422.27 per oz.

However, he confirmed reports that 24 employees were laid off recently and about 100 now remain on site.

“With the continued support of the companies’ other creditors, the mine is expected to operate beyond 1992,” Flanagan told The Northern Miner.