Ocean Partners backs Alaska gold project

SEATTLE (Scrap Monster): Grande Portage Resources Ltd. June 25 reported that Ocean Partners UK Ltd. has agreed to offtake direct shipping ore produced at New Amalga and is providing funding to help advance development of this proposed gold mine project about 16 miles (25 kilometers north of Juneau, Alaska.

"This is strong validation of our project's robust economics as outlined in our recently filed PEA (preliminary economic assessment), and our vision to develop the mine using a direct-ship platform," said Grande Portage CEO Ian Klassen.

The robust economics forecast by the PEA are anchored by the high-grade nature of the gold deposit and the company's direct shipping ore strategy for New Amalga, which will eliminate the costs and permitting complexity associated with building a mill and tailings storage facility.

The high-grade nature of New Amalga is reflected in the estimated 4.72 million metric tons of indicated resource averaging 9.47 grams per metric ton (1.4 million oz) gold and 5.86 g/t (891,000 oz) silver, plus 1.81 million metric tons of inferred resource averaging 8.58 g/t (515,700 oz) gold and 6.70 g/t (390,600 oz) silver outlined so far at the Southeast Alaska mine project.

Based on this resource, the PEA finalized earlier this year outlines plans for an underground mining operation that would use ore-sorting technology to produce a high-grade concentrate that could be shipped directly to a third-party for processing. The concentrates produced over the first seven years of operations at this direct shipping ore mine are expected to contain approximately 1.05 million ounces of gold, or about 150,000 oz per year.

This operation has attracted the attention of and funding from Ocean Partners, a United Kingdom-based commodities trading firm that specializes in supporting DSO projects.

"We are delighted to forge this important partnership with Grande Portage Resources," said Ocean Partners CEO Brent Omland. "Their New Amalga Gold project has all the right ingredients for success: a direct shipping ore platform that avoids an onsite processing plant and tailings facility to minimize CAPEX (capital expenditures) and expedite permitting, an expandable high-grade gold resource, and the potential for rapid return on investment capital."

Under a definitive agreement signed by the mine developer and commodities trading firm, Ocean Partners will offtake up to 100% of the direct shipping ore produced over the first seven years of commercial operations at New Amalga.

To fortify the partnership, the UK firm has also agreed to acquire C$6 million ($4.2 million) in Grande Portage equity and provide the mining company with a $25 million loan to cover late-stage construction, working capital, and cost overruns.

"The substantial above-market equity infusion and the construction loan and overrun facility further unite our two companies with the common goal of responsibly developing Alaska's next underground gold mine," Klassen said.

The equity investment will make Ocean Partners the second-largest Grande Portage shareholder behind Eric Sprott, who currently owns approximately 19.5% of the company's shares.

In mid-June, Grande Portage launched a 4,300-meter drill program focused on upgrading resources in key areas of the high-grade gold deposit, as well as collecting geotechnical and hydrogeological data for mine development plans that will be further detailed in an upcoming prefeasibility study.

The company is also collecting additional environmental baseline data in preparation for state and federal permitting, which is slated to get underway next year.

With the permitting process to take about two years, Grande Portage is targeting first production at the Southeast Alaska gold mine in 2031.

"We are excited to be working with the team at Grande Portage and look forward to seeing the New Amalga Gold project emerge as one of Alaska's next underground gold mines," said Omland.

Courtesy: www.miningnewsnorth.com