NEWS ROUNDUP — Twin Gold executes lease for Atlanta

By executing a mining lease and option agreement, Toronto-based Twin Gold (TWG-T) has slashed a net smelter return royalty to 0.5% from 5% at its 80%-held Atlanta gold mine project in Idaho.

Twin Gold executed the lease and option-to-purchase agreement by making an initial payment of US$100,000 to Monarch Greenback of Idaho. During the 10-year term of the new lease, a unit of Twin Gold has the right to buy the property for US$2 million.

Twin Gold is attempting to place the Altanta mine back in production as a conventional, open-pit, heap-leach operation capable of producing 70,000-80,000 oz. gold plus 200,000 oz. silver annually. The lower royalty is expected to cut production costs by an estimated US$17 per oz.

Previous attempts at production were hampered by poor recoveries. However, a scoping study by Behre Dolbear has demonstrated that finer crushing and extended leaching increase the expected gold extraction by five to eight percentage points, to between 62% and 65%. Twin Gold says these improved recoveries will result in favourable internal rates of return (17-21%) at an average gold price of US$290 per oz.