Canadian gold producer Scorpio Gold Corp. (CVE:SGN) shares jumped nearly 10% on Tuesday after it signed a letter of intent with Lode-Star Mining Inc. for a custom milling agreement to provide custom milling of mineralized material at the company’s Goldwedge processing facility, located 75 miles north of Goldfield in Manhattan, Nevada.
The Goldwedge mill is a 400 ton per day facility with an associated gravity recovery circuit. Testing of Lode-Star’s mineralized material is expected to commence in first quarter 2017 and is pending receipt of approval from the Nevada Division of Environmental Protection (“NDEP”).
This testing will provide the baselines for metallurgical recoveries and mill throughput data to support Lode Star’s mine permitting with the NDEP. The coarse gold component of Lode-Star’s material will be recovered by the gravity circuit. Further testing will be conducted on the tailings to determine the potential economics of shipping tailings to Scorpio Gold’s 70% owned Mineral Ridge heap leach operation for final recovery of cyanide-leachable precious metals. Assaying services can be provided to Lode Star at Mineral Ridge.
The companies are moving forward with permitting requirements associated with the Agreement. The Agreement requires completion of a cost analysis and other operational details which are expected to be concluded upon completion of the testing. The parties believe this arrangement can be mutually economical and operationally beneficial for their respective operations.
“We hope to develop a long-term relationship with the Lode-Star team and we continue to look for other synergistic opportunities within our surrounding area,” said Chris Zerga, President of Scorpio Gold Corporation.
Scorpio shares were up 9.5% at C$0.12 on Tuesday.
Story by ProactiveInvestors