Crew Gold (CRU-T, CRUGF-O) has struck a deal to buy the dormant Nugget Pond gold mill in Newfoundland from New Island Resources (NIS-V) so that it can process ore from its Nalunaq gold mine in Greenland.
Crew will pay New Island 3 million shares for the mill, and allow New Island to use the mill for any ore it mines on its own nearby mineral leases.
Crew’s plan is to spend some US$8 million to refurbish and modify the plant and build the required offloading and transportation facilities.
Crew has been shipping its ore to Rio Narcea Mines’ (RNG-T) mill in Spain for toll milling.
Crew reckons that the Nugget Pond solution will shave US$2-3 million off its operating costs, or about US$20-30 per oz.
Richmont Mines operated Nugget Pond from 1997 to 2004, and processed ore from the Nugget Pond and Hammerdown mines. New Island will acquire the Nugget Pond processing facility from Richmont under a 2005 option agreement.
Crew and New Island have also formed a joint venture at the latter’s Glover Island gold project in Newfoundland, whereby Crew must spend C$5 million on exploration over five years to earn a 60% interest in the project.
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