Heather Latter
The feasibility study for Rainy River Resources’ Rainy River Gold Project, a large gold system centered in Richardson Township north of Barwick, has been completed and offers several positive outcomes to focus on as the project moves along, such as employment and the rate of return for stakeholders.
“This is a road map toward construction and operation of this mine,” explained company president and CEO Raymond Threlkeld.
“This sets the stage . . . for how we’re going to execute this, what some of the design details are, and just when and how we can do this.”
Threlkeld added the study “outlines an outstanding project, located in one of the best mining jurisdictions in the world, conveniently surrounded by infrastructure, and with tremendous exploration potential.”
One key point is that the proposed mine will bring plenty of jobs to the area.
“During construction, which will occur in mid-2014 to mid-2016, we will employ about 400 people,” Threlkeld noted.
“And they will be housed locally.
“A lot of people will come from the local area, but there will be some specific trades that might not be available in the area and we’ll have to bring in people,” he explained.
“During operation, we’ll reach a peak employment of 600 people,” Threlkeld said, noting that includes 89 employees in the process plant, 26 in general and administrative roles, 299 in the open pit mine, and 187 in the underground mine.
He added with a multiplier effect of 3.5:1, according to the Canadian Mining Association of Canada, that means for every one job at the Rainy River Gold Project, about three-and-a-half more will be directly created.
“That’s a potential of 2,000 people being directly related to that mine,” Threlkeld enthused.
“And the income generated from 2,000 in that area is huge,” he added, noting the spending and taxes will be equally as great.
“It’s a real win-win for the entire area and for Rainy River.”
Threlkeld said the feasibility study also shows a very high rate of return for investors.
“The higher grades mined in the open pit and underground will enable the average cash costs in the first five and 10 years to be $413 and $468 per ounce of gold . . . respectively, which would place the Rainy River Gold Project in the lowest and second-lowest quartiles for cash costs, respectively, among gold producers worldwide,” he remarked.
“This mine plan, combined with the exploration potential in our district, makes the Rainy River Gold Project stand out in Canada as a low-risk, high-return project.
“[The feasibility study] de-risks the project,” he added.
“The level of engineering is such that it gives us confidence, it gives our shareholders confidence, that the money we spend in the future to build this project won’t have overruns . . . and the rate of return established will give the investors comfort that they will get a very good return on their investment.”
Where many mines in Canada see their overall costs range anywhere from $1,000-$1,200 an ounce (all-in cost), the Rainy River Gold Project is showing just $771 an ounce.
“[That] makes our rate of return much higher than any of these mines,” Threlkeld said.
“Our rate of return for the investment is, after taxes, 23.7 percent,” he added.
“That’s an outstanding rate of return in the mining business today.”
Now that the feasibility study is completed, the next step for the project is to submit the environmental assessment sometime after June.
The federal government currently has accepted the terms of reference, with the company waiting for the provincial government to accept it, too.
“We need to get through the environmental assessment period and move toward getting our construction permits,” Threlkeld noted.
“We hope to have those in mid-2014 and move forward. . . .
“It takes a lot of time to get these things going, but we’re moving along as expected.”
In the meantime, the company is continuing exploration at the site.
“The Intrepid Zone, which is not included in the feasibility study, exemplifies the potential of the district and is expected to add high-quality ounces to an already outstanding Rainy River Gold Project,” Threlkeld stressed, adding right now they are planning on a 10-year mine but it could be a 25-year one.
“We’ve enjoyed very good support from the community and we look to continue that,” Threlkeld added.
“We’re working very hard with the local townships there and with all of the communities, the aboriginal communities nearby, and we have good support from them.”
Rainy River Resources aims to continue to be active in the local scene, supporting a wide variety of community events and training programs.
“We’re stakeholders in the area and there are people who are shareholders in the Fort Frances, Rainy River, Emo communities,” Threlkeld reasoned.
“Anything we can do to help the community, we are happy to do so.”
