New Gold prospecting for other buried gold deposits

At open houses, New Gold discusses Blackwater Project developments

New Gold hosted open houses across the district last week to discuss the Blackwater Project.

“We’ve been committed since day one, when we took over the project, to ensuring that the local community is well informed of benefits from the project,” said Timothy Bekhuys, director of environment and sustainability for New Gold, on Oct. 15.

Almost 180 people attended the open houses in Fort St. James, Burns Lake, Fraser Lake and Vanderhoof, where the company has opened an office to provide information about the project and the many economic opportunities associated with the proposed mine.

“We feel it is important that those living and doing business in the area surrounding our projects are aware of our progress and plans and that they have an opportunity to express their aspirations and any concerns they may have related to the Blackwater Project,” said Bob Gallagher, chief executive officer of New Gold, who attended the open house in Vanderhoof.

The project, now in an advanced phase of exploration, is expected to inject tens of millions of dollars into the local economy over some 17 years of gold and silver mining operations by way of spending on goods and services.

“It’s absolutely critical that we walk the talk and make sure that, when we say we’re going to invest locally in the community, we actually do,” said Bekhuys.

Ever since New Gold started drilling at the Blackwater site in June 2011, the company has reaffirmed its commitment to working with First Nations and creating jobs for local people.

“We do recognize that First Nations have lived in these areas for generations, and we have to respect that our mine is only there for a short period of time for a relative sense,” said Bekhuys.

“We need to respect people who have been there for a long time.”

Pending the approval of provincial and federal environmental assessments, and the acquisition of permits, licenses and authorizations from government agencies and ministries, New Gold plans to start building the Blackwater mine in 2015, hiring 1,000 to 1,500 workers for construction.

When the trucking and shoveling of ore begins in 2017, the mine is expected to employ an average of 500 full-time workers until closure in 2034.

“We think it’s a real catalyst for the area, as the forestry industry recovers from the mountain pine beetle epidemic, that these types of mines form a bridge for employment for a lot of people,” said Bekhuys.

More than $10 billion and $775 million of gold and silver deposits have been identified at the Blackwater site at an assumed price of $1,275 and $22.50 per ounce of gold and silver respectively, well below current market values.

The size and scope of the project is equally extraordinry in that the proposed mine will produce an average of 507,000 ounces of gold annually, more than New Gold’s gold mining operations in California, Mexico, Australia and New Afton, B.C., combined.

“This is a real key to the future of New Gold,” Bekhuys said about the project.

Exploration in the Blackwater area has been ongoing since 1973, when Granges Inc. discovered promising concentrations of silver, lead and zinc in streams of runoff originating from nearby Mount Davidson.

Recognizing the potential for rich gold deposits in the region, Silver Quest Resources Ltd. joined the project in 2005, followed by Richfield Ventures. Corp. in 2009.

Then, last year, as gold prices were setting record highs of $1,550 and almost $1,900 per ounce, New Gold acquired the companies and became the sole owner of the Blackwater site.

Having consolidated landholdings that encompass 1,000 square kilometres of Crown land adjacent to the Blackwater mine, New Gold has started prospecting for buried gold elsewhere.

“We think there is lots of potential for other sites in the area,” said Bekhuys.

But before mining can start, hauling roads, a 133-kilometre transmission line and a processing plant have to be built.

Water is also needed.

According to an Oct. 10 technical report that was completed by AMEC America Inc. at the request of New Gold, Tatelkuz Lake has been identified as a potential source from where the Blackwater mine could pump water via a proposed 15.7-kilometre pipeline.

Bekhuys said that, in addition to lakes, the mine would also rely on rainfall and groundwater and would carry out a feasibility study in the next year to establish a permanent water source.

In keeping with its mission to mine responsibly, New Gold has ensured that waste water from the processing plant, which requires cyanide to extract the gold and silver from the ore being mined on site, won’t be discharged into streams but rather stored in two tailings pond that compose two-thirds of the Blackwater site.

Upon mine closure, the tailings ponds will be converted into large wet lands as part of a $101-million reclamation and enclosure process.

“We’ll show people what we’re proposing. We’re certainly there to open dialogue.”

The proposed Blackwater mine, located 110-kilometres southwest of Vanderhoof, will reach a maximum depth of 400 metres.

New Gold is also looking at installing an air strip on site.

 

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