More11 Jun 2013 11:22
It has the prospect of initially mining the reckoned-to-be extremely high grade Bonanza zone where the ore is said to run at 60-80 oz/tonne, which would give it a big cashflow kick, but the overall ore grade would only be around a quarter of this when the main ore horizon is reached.
There is, however, always a danger when working on such 'historic' resource estimates that they don’t meet current assessment standards, but could prove to be substantially lower. The company is also planning to assess the old mine tailings dumps with a view to blending material from these in with the hoped-for ultra high grades from some of the ore shoots. Black Mountain says it has access to the geologist who last assessed the New Departure resource back in the in the late 1990s.
To keep costs low, Black Mountain is using contract miners and will have the New Departure ore custom milled in one of two 'local' mills which are said to have plenty of capacity which would keep toll milling costs low, although details on this are a little sketchy, and there was no information given on any metallurgical testing. If all goes to plan, New Departure could produce 350,000 oz silver in the current year rising to 1 million ounces next year, generating cashflow.
The second project, Conjecture, in neighbouring Idaho, is considered perhaps the better of the two properties and, at the moment, the timing of first production there is uncertain, except it is projected by the company to be in the third quarter of the current year. Some uncertainty lies in whether Black Mountain will seek funds to put it in production (around $4million only) which would probably lead to an admittedly fairly minor, dilution of its stock, or develop it out of hoped-for cash flow from New Departure.
The latter would probably delay the project by one to two months, and assumes New Departure performs as suggested. Conjecture also has the option of milling its own ore at the nearby Lakeview mill, also controlled by Black Mountain and which would require some refurbishment to bring up to speed. Landau talks about running a conveyor from mine to mill – a distance of about 3 km, although the company presentation suggests ore would likely be trucked there, at least in the beginning assuming it goes for the mill upgrade. Toll milling in that area also remains a possible option – trucking high grade ore to other mills in the area should not add significantly to costs, although the added cost of custom milling the ore depends on what kind of deal can be negotiated and capacity availability.
What particularly attracts Black Mountain to Conjecture, the company says, is its existing infrastructure, its reported reasonably high grades and its unproven long term potential. It overlies the unmined Revett formation which has been a major source of silver in the nearby Coeur d’Alene district although is yet to be tested at Conjecture
The geologist who oversaw the most recent resourc
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