Mr. Greg Romain reports
GOWEST PROVIDES UPDATE ON BRADSHAW DEVELOPMENT
Gowest Gold Ltd. has provided an update on its advanced exploration activities at the company's 100-per-cent-owned Bradshaw gold deposit located in the Timmins gold camp, including its continuing bulk sample program.
Completed over 2,098 metres of underground development;
- The 30-, 45- and 60-metre levels are under development;
- Silling is well under way on all levels;
- 28,567 tonnes of development material have been stockpiled on surface for sorting, milling and sale as concentrate;
- No injuries at the project to date for mine site surface and underground construction;
- Water treatment plant is fully operational and the discharge is environmentally compliant;
- Agreement to process concentrate in place (see Gowest news release dated Feb. 14, 2018);
- Current mining temporarily suspended due to the lack of room for further development material stockpiling as well as uncertainty on the timing of material processing.
Tolling agreement, Northern Sun (Redstone mill)
The company and Northern Sun Mining Corp. are continuing to develop a formal agreement pursuant to which Northern Sun would process ore from Bradshaw by way of a toll-milling arrangement. To that end, Northern Sun has received conditional approval for the processing of the ore through the Redstone mill from both the Ministry of Environment and Climate Change and the Ministry of Northern Development and Mines, subject to satisfying certain provincial government guidelines, the timing of which cannot be determined. While Gowest is committed to completing an arrangement with Northern Sun, there can be no assurance that such an arrangement will be reached between the parties and, as such, the company is reviewing and pursuing various alternatives for the processing of ore from its bulk sample, as well as through to preproduction and into full mining operations.
Redstone mill acquisition
Northern Sun and the company have mutually determined to terminate the previously announced share-purchase agreement entered into between the parties, pursuant to which the company was to acquire a 50-per-cent interest in the Redstone mill and form a joint venture with Northern Sun for its operation (see Gowest news release dated June 16, 2017). Certain conditions precedent to the completion of the transaction have not yet been satisfied and the timing for the satisfaction of such conditions precedent remains uncertain at this time. This termination allows for both Northern Sun and Gowest to re-evaluate their strategic plans.
As the company reviews and evaluates its options for processing ore from its bulk sample, and given the uncertainty of the timing surrounding the processing of the bulk sample and the fact that there is no further capacity at the mine site to store any further underground mined material, the company has determined to suspend current mining operations, but only to the extent that will ensure there will be no delay in the renewal of the development of the mine when conditions warrant. During this period, the company will continue to focus on deferring, reducing or eliminating non-essential expenditures.
The company's key partners remain supportive of its efforts to develop the Bradshaw mine. To the extent possible, the company and its key partners will continue to work co-operatively to ensure that mining operations may be resumed as soon as possible once the company has secured both necessary arrangements for processing ore from Bradshaw and additional financing.
The company continues to have support from PGB Timmins Holdings LP, which provided the initial financing for the commencement of development of the Bradshaw mine through the prepaid forward gold purchase agreement entered into between the company and PGB (see Gowest news release dated Dec. 16, 2016).
With the termination of the share purchase agreement for the acquisition of a 50-per-cent ownership stake in the Redstone mill, at this time the company cannot satisfy the few remaining conditions precedent for the second tranche of the prepaid forward gold purchase agreement, which were related primarily to the above-noted acquisition by the company and the completion of a toll-milling agreement.
Discussions with PGB are continuing; however, there is no requirement for the company to seek or accept any further financing from PGB.
Gowest has spent the past year derisking the Bradshaw deposit through its drilling program (see Gowest news releases dated Nov. 29, 2017, and Feb. 12, 2018), and its underground mine development. It is now in a position to start processing its stockpiled material. In order to continue its bulk sample program and to enable it to refine its current plan toward full production, Gowest is planning to announce a financing in the near term.
"Given the timing to process our Bradshaw material at the Redstone mill has been delayed well beyond what was originally contemplated, it is only prudent that we take the necessary steps we are announcing today," said Gowest president and chief executive officer, Greg Romain. "I am confident that we will find a solution in the near future to resume mining operations at Bradshaw."
About Gowest Gold Ltd.
Gowest is a Canadian gold exploration and development company focused on the delineation and development of its 100-per-cent-owned Bradshaw gold deposit on the Frankfield property, part of the corporation's North Timmins gold project (NTGP). Gowest is exploring additional gold targets on its over-100-square-kilometre NTGP land package and continues to evaluate the area, which is part of the prolific Timmins gold camp in Ontario. Currently, Bradshaw contains a National Instrument 43-101 indicated resource estimated at 2.1 million tonnes grading 6.19 grams per tonne gold containing 422,000 ounces gold and an inferred resource of 3.6 million tonnes grading 6.47 grams per tonne gold containing 755,000 ounces gold. Further, based on the prefeasibility study produced by Stantec Mining and announced on June 9, 2015, Bradshaw contains mineral reserves (mineral resources are inclusive of mineral reserves) in the probable category, using a cut-off of three grams per tonne gold and utilizing a gold price of $1,200 (U.S.) per ounce, totalling 1.8 million tonnes grading 4.82 grams per tonne gold for 277,000 ounces gold.
The technical information in this news release has been reviewed and approved by Jeremy Niemi, PGeo, Gowest's director of exploration, who is the qualified person for the technical information in this news release under National Instrument 43-101 standards.
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