A common saying in the mining industry is that the best place to find a mine is beside an old mine.
A small junior company is following that lead and focusing on being a simple story for the market to understand.
Enter Golden Dawn Minerals (GOM:TSXV) which is investigating the potential of re-opening the historical May Mac Mine located near Greenwood in south-central British Columbia.
May Mac is a former producer that last operated in 1983 with total production of 18.5 kilograms of gold, 693 kilograms of silver, 58 tonnes of lead, 36 tonnes of zinc and 864 kilograms of copper. Operations closed due to uneconomic metal prices at the time.
German mining entrepreneur Wolf Wiese (CEO) and management believe that the May Mac mine has excellent potential to still host economic ore.
Infrastructure on the property is excellent with an old historic mill capable of 100 tonnes per day (would need further investment to reopen). The town of Greenwood is located just 5km away via a paved highway.
A power line runs right up to the old mill and water access is readily available.
The team is following a similar business model used by its neighbour major gold producer Kinross Gold (K:TSX).
Kinross has been very successful exploring around old mines with new technology and getting value out of the wall rock from past producing mines. Wall rock is the material between the narrow veins. Old miners strictly focused on the high grade veins at the time.
Kinross has been successful in finding economic rock between these veins using today’s newer technology and the help of higher metal price.A fair amount of this success has occurred just across the border from the claims in British Columbia at operations in Washington State.
A key member of the Golden Dawn team is Dr. Mathew Ball. Mr. Ball is an experienced geologist previously involved in the Bralorne Gold mine in B.C. Mr. Ball is very hands on regularly being on site guiding drill programs.
Golden Dawn is currently drilling with 5 holes completed to date (#6 in progress and drill deeper) and sent to the lab with assays pending. Drilling continues with up to 1500 metres planned.
The first six holes all intersected the mineralized zone and management and investors are eagerly awaiting assays.
Drilling will also occur on the Boundary Falls property (Amigo mine).
A press release out on November 23rd stated that dill hole 6 has hit a “significantly mineralized intercept’ and more details can be found here. This is positive news as it shows that mineralization is present in the number 7 level which is similar to mineralization previously mined from the number 6 level. A decision was made to continue drilling hole 6 deeper (to 300-350m) to determine if the number 2 vein continues.
If assays come back positive the plan is to fund (additional financing will be needed) another work program for 2016 consisting of more drilling and if vein extension continues possibly extracting a bulk tonne sample (10,000 tonnes) which would provide cash flow to Golden Dawn.
All permitting has been obtained for the 2015/2016 planned work permitting including the bulk sample.
Golden Dawn has a strong European following and insiders own ~12% of the 36.73 million shares (58.5 fully diluted) outstanding.
Investors looking for a speculative junior play in a proven historic area would be worthwhile to add Golden Dawn (GOM:TSXV) to their watch list and follow company progress.
Investors can get a good overview of the current drill program by watching this quick video below.
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