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Mining company expands drilling at Nova Scotia, Newfoundland sites as gold price stays strong

Anaconda Mining has been active at a number of sites on Newfoundland's Baie Verte Peninsula in recent years. — David Howells photo courtesy of Anaconda Mining
Anaconda Mining has been active at a number of sites on Newfoundland's Baie Verte Peninsula in recent years. — David Howells photo courtesy of Anaconda Mining - Contributed

Goldboro construction could start at end of 2021

With the price of gold remaining strong amidst the COVID-19 pandemic, a Canadian mining company is expanding its drilling program at its East Coast sites.

Anaconda Mining is actively drilling in three projects in Nova Scotia and Newfoundland and Labrador. In Canada's most eastern province, Anaconda has a pair of projects located on the Baie Verte Peninsula — a region of the province where the company has some history.

The Point Rousse project includes deposits at Stog'er Tight and Argyle where drilling has recently occurred. Since 2010, Anaconda has produced over 118,000 ounces of gold at its Pine Cove mining site, which is part of the same project. It is now in the process of transition mining activity away from Pine Cove to the other sites. The second project on the peninsula is Tilt Cove, an exploration-stage project located about 45 kilometres by road from the Pine Cove mill.

An aerial view of the Goldboro, Nova Scotia Anaconda Mining site. — CONTRIBUTED - Contributed
An aerial view of the Goldboro, Nova Scotia Anaconda Mining site. — CONTRIBUTED - Contributed

In Nova Scotia, Anaconda's main focus is the aptly-named Goldboro project in Guysborough County. Earlier this month, the company announced results for its 5,500-metre drill program, which has intersected 13 mineralized zones, 11 of which featured visible gold occurrences. Geological model projections for the area consistently lined-up with these findings. The program has now been expanded to a depth of 15,000 metres.

"I think this market is going to be around for a while and the gold price is going to stay strong, so we need to do what we can within our aggressive growth strategy, and that is to build a mine internally, which is Goldboro," Anaconda president and CEO Kevin Bullock said, adding merger and acquisition opportunities are also important to the company moving forward. In those situations, Anaconda is looking for seemingly bite-sized smaller projects that hold the potential to be acted on quickly.

The earliest the company can expect to have permits for construction at Goldboro would be the end of 2021, with drilling expected to continue until then. Construction work would likely continue through to the spring of 2022. Bullock expects the company will be in a good position for project financing with solid feasibility work and a strong price environment.

Meanwhile in Newfoundland, the Stog'er Tight mine drilling reached a depth of over 1,700 metres as of mid-August. The company has mined there in the past but identified an extension of mineralization and found geological and geophysical evidence of more drill targets — Bullock said this site has produced some of the best results he's seen in the last 10 years in terms of width and grade.

An open-pit mineral reserve was announced for the Argyle site earlier that month, and the company anticipates ore production there in the fourth quarter of 2020. The company expects that will produce for two years. Exploration at the Tilt Cove site, including a 35-line kilometre geophysical survey and 10,000 metre diamond drill program, will start at the end of September.

Price factors

The price of gold has been quite high of late, exceeding $2,700 per ounce in Canadian dollars early last month before more recently taking a

dip below $2,600. Overall, the price is up considerably from where it has generally been over the last 10 years.

With governments spending a lot of money to get through the COVID-19 pandemic, demand for gold and other precious metals has been on the rise.

"Then you get these capitulation and consolidation moments where it comes back down, because people who were in earlier have made significant profits and they're seeing the stock market drop 400 or 500 points in a day, and they're covering their other losses with their winners ... gold has been doing this sphere routine in the stocks,” Bullock said. “You see it moves up, and then consolidation, and then moves up, and consolidation, and that's very healthy for the gold price. There's global issues with politics, and there's global issues with finance. I don't see any of that settling quickly, so I think the gold price is going to be strong for quite some time."

In this climate, the goal for Anaconda is to increase gold production. Even weaker deposits that might not work out typically can prove to be profitable in these circumstances, he added.

"In that case, we're going as fast as we can with the development of Goldboro," he said. "We've been able to approve the development of Argyle ... and we're developing that now to keep production going there."

andrew.robinson@thetelegram.com

@CBNAndrew

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