In addition to receiving a positive feasibility study for the 1100 Lens project near Rouyn-Noranda, Que., Audrey Resources (TSE) has obtained the necessary financing to reopen the Mobrun mine, which hosts the lens.
The 1100 Lens, which contains probable, minable reserves of 8.5 million tonnes grading 4.49% zinc, 0.74% copper, 32.5 grams silver and 1.3 grams gold per tonne, is in the preproduction phase.
The cost of developing the mine is expected to be $36 million. Work now under way includes raising, drifting and expansion of the mill.
The financing, required for preproduction and development, consists of a gold loan of up to 83,333 oz., worth about $45 million, from Cambior (TSE). The loan will be repaid over five years, beginning in March, 1996. Audrey’s current debt owed to Cambior will be converted into 9.1 million common shares of Audrey at $1.25 per share. Total proceeds from the debt conversion will be $11.4 million and once the transaction is complete, Cambior will own 72.3% of Audrey’s outstanding shares.
Commercial production should start in the second quarter of 1995 at 2,000 tonnes per day, to be mined by large-diameter longhole methods. Average annual production for the first five years is projected at 22,000 tonnes of copper concentrate grading 20% copper, 47,000 tonnes of zinc concentrate averaging 54% zinc, 358,000 oz. silver and 23,800 oz. gold. Recoveries are estimated to be 83.6% copper, 85.8% zinc, 40% silver and 59.5% gold.
The mine will employ 140 people during preproduction and 125 thereafter.
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