Tahoe Increases its Timmins District Interests
Tahoe acquired Goldcorp’s Bell Creek royalty for $12.5 million in cash. Under the terms of the letter of intent, Tahoe will assume all closure liabilities with respect to the Whitney Joint Venture properties, including historic liabilities not previously assumed by the joint venture. These liabilities are currently estimated by Tahoe to total approximately $12 million, an amount that Tahoe believes could be reduced through the development and operation of an open-pit mine.
The Whitney joint venture transaction is subject to execution of a definitive agreement and to approval of Tahoe’s board of directors. Both the Bell Creek mine and the Whitney property, which is currently owned 70% by Tahoe and 30% by Goldcorp with Tahoe as the operator, are located approximately 20 km east of the center of Timmins. Bell Creek is an underground mining operation that produced 39,700 oz of gold in 2015 from processing of 296,200 mt at an average grade of 4.4 g/mt.
The Whitney joint venture property covers approximately 8.9 km2 of highly prospective exploration ground on which the former producing Hallnor, Broulan Reef, Bonwhit, and Hugh Pam mines are located. Together, these historic properties have produced a total of 2.4 million oz of gold. Tahoe is currently engaged in a 70,000-m surface drilling program aimed at confirming and expanding resources and advancing a model based on a planned open-pit operation that would transition to underground mining.
Tahoe Executive Chair and CEO Kevin McArthur said, “Bell Creek and Whitney are two key components of our strategy to grow gold production in Timmins to more than 250,000 oz/y by 2020. At Bell Creek, we are eliminating the 2% NSR royalty at a time when the new shaft project is expected to double production and to significantly increase mine life. To the south of Bell Creek, Whitney has open-pit and underground potential in close proximity to the Bell Creek mill.
“We are pleased to be advancing Whitney as a wholly owned project. We also look forward to continuing our work with Goldcorp to maximize the value of the Timmins Gold Camp for all stakeholders.”