River Gold, Muscocho group in mill deal

Gearing up for production during the third quarter of this year at its Eagle River gold project near Wawa, Ont., River Gold Mines (TSE) has reached a leasing deal for the nearby Magnacon mill.

The mill is owned jointly by Muscocho Explorations (TSE), Flanagan McAdam Resources (CDN) and Windarra Minerals (TSE). Subject to regulatory approval, the Muscocho joint venture has agreed to lease the mill for up to 10 years, with an option to purchase.

The River Gold property and the mill are about 11 miles distant. River Gold has agreed to refurbish and operate the mill, which processed ore from the Magnacon gold property for a brief period a few years ago. The joint venture will receive a milling fee for each ton of ore processed. The mill has the capacity to process about 200,000 tonnes of material annually.

River Gold anticipates it will be extracting about 100,000 tonnes per year at Eagle River, yielding 40,000 oz. gold.

The deal gives the joint venture the right to have processed at the mill up to a total of 100,000 tonnes of ore annually from area properties belonging to the three companies.

The land holdings of the joint venture include the Magnacon mine and surrounding property, and the Eastern and South Mishibishu properties. Muscocho and Flanagan, having completed recent financing arrangements, say they are planning new exploration work at the Magnacon property. The Eagle River project was partially developed by Central Crude, which was taken over by River Gold.