Northwest moves to next stage in Colomac construction phase

Having completed plant construction at its wholly owned Colomac gold project, 137 mile north of Yellowknife, N.W.T., NorthWest Gold (AMEX) (formerly ABM Gold) is tuning up the project’s milling facility. According to the 52% owned Northgate Exploration (TSE) affiliate, 4,600 oz. gold were poured at the open pit project in June, and design capacity should be reached by the fourth quarter of this year.

Built at a cost of $166 million, Colomac is expected to produce 200,000 oz. gold annually when the operation is running at full speed.

But as NorthWest needs a gold price of US$365 per oz. during the mine’s projected 8-year lifespan, there are still doubts as to how profitable this venture will turn out to be.

As gold has been trading recently in the US$360-per-oz. range, NorthWest says it is looking for additional financing to meet its working capital and capital expenditure requirements.

Last month, the Colomac mill was being operated at 6,200 tons per day, and the facility should reach its design capacity of 10,000 tons per day by the fourth quarter of this year.

“This rate has been achieved over short periods, but sustaining operations at 10,000 tons per day requires improving the performance of the grinding circuit which is still undergoing mechanical fine-tuning and debugging,” NorthWest said.

Meanwhile, because an unidentifiable amount of gold is being tied up in the grinding circuit, NorthWest said it is unable to calculate head grades and recoveries accurately.

However, as tailings assays are meeting expectations, the company is confident that recoveries of more than 90% are currently being achieved.