Freewest opts to participate in Holloway project

With construction already under way, Freewest Resources (TSE) has elected to maintain its 33.86% interest in the Holloway gold project near Matheson, Ont.

The project was given the green light in April, following completion of a positive feasibility study by operator Hemlo Gold Mines (TSE). Hemlo has a 50.79% direct interest in the project, with Teddy Bear Valley Mines (CDN) holding the balance.

The total capital required to construct and develop the 1,250-tonne-per-day underground mine is estimated at $55 million. Already holding $8 million in cash, Freewest has begun discussions with financial institutions to raise an additional $12 million to meet its share of the costs.

Minable reserves are calculated at 5.8 million tonnes grading 6.74 grams per tonne on a cut-and-diluted basis. These reserves are sufficient for 13 years of production and the deposit remains open at depth.

Construction began in April and, currently, 70 people are employed on site. The production shaft is being collared, surface infrastructure is being built and the ramp from the 400-metre level is progressing at the rate of 8.5 metres per day. Once in operation, the mine is expected to employ 130 people and produce 100,000 oz. gold per year at a cost of US$200 per oz. Freewest’s share of production will be 34,000 oz. per year.

In other news, geological and geophysical surveys are under way on Freewest’s gold project in Marriott Twp., Ont. The property straddles the Destor-Porcupine fault zone and is adjacent to Holloway Twp. Elsewhere, Freewest is encouraged with results received to date on two gold prospects in the Bathurst area of New Brunswick.