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Gold City Mining Company ( GCP.V ) / 604-682-7677 fax 604-682-0089
( Post roll back 1 for 3 )
Issued shares = 11,500,000
Fully diluted = 13,000,000
Share price = $0.18 C
FD Market Cap = $2,340,00.00 C / $1,684,800.00 U.S.
* Management owns over 40% of FD shares, friends and family another 20% or so.
John Chapman / President
John Chapman has over 28 years in the mining industry, both field and corporate, including exploration, mine development, and mine operations. Formerly Mr. Chapman has worked for Placer Dome, Manalta Coal, and as a student for Kennecott and International Nickel. He is also a director of Falcon Concentrators, Newcoast Silver, Weymin Resources, Lynx Geosystems, and Oakmont Ventures. Mr. Chapman has surrounded himself with successful, top notch professional people that have a history of getting the job done. I will follow up with resumes at later dates.
Managements' most recent success story is the 1,500 TPD Keystone Gold Project in Northern Manitoba. This mine produced 18,345 ozs of gold for the first quarter of 1997 at a cash operating cost of $170.00 U.S. oz. Unfortunately, management lost control of the company through the sale of a large block of stock from friendly hands to hostile, and although shareholders were rewarded for a successful project, it was not the reward that could have been expected if management could have built on their success. Needless to say, this experience is fresh in the minds of management and is not likely happen again.
Since 1994, with Gold City Mining as the new vehicle, the same group of individuals have assembled more then a few projects in the companies. Two of these are well advanced and slated for full feasibility immediately. These two projects are named Old Nick and the Welbar Gold Project and are the projects I will focus on for now.
____________ Old Nick ______________
Applied Mine Technologies (AMT) has an option to acquire a 70% joint venture interest in the Old Nick by spending 8 million in exploration and developement by December 31, 2000. Of the remaining 30%, 15% can be earned by Pheonix Gold Resources and Orion International Minerals, subject to a 3% net smelter royalty up to 10 Million Canadian and 1% thereafter. Some or all of the interest could possible be regained if money is not raised by AMT soon.
The mineral inventory stands at 30 million tonnes ( Measured & Indicated ) of 0.2% nickel & 0.01% cobalt. 15 million tonnes ( Inferred ) and 70 million tonnes (Potential ) of similar Ni/Co grades. This deposit @3.50 nickel & 12.00 cobalt has a gross value of $24.00 C / tonne or more than the Kemess, Huckelberry, or the Red Chris deposits.
The deposit has the potential to produce high purity nickel and cobalt on site using conventional technologies in an innovative combination of leaching, solvent extraction, and electrowinning. Conceptual studies show production rates of 5 million tonnes of ore per year yielding 8.5 million Kg of nickel and 425,000 Kg of cobalt. Using a value of U.S. $3.50/Lb nickel ( currently $3.00 ) and U.S. $12.00/Lb cobalt ( currently $23.00 ) this project would generate pretax cash flow of C$58 million per annum. Nickel production cost ( net of cobalt ) is estimated at U.S. $1.45/Lb. The pretax DCF-ROR based on investment capital of C$124 million is 40%. Net to Gold City would be about C$8.7 million plus the royalty.
The financing necessary to bring this project to full feasibility, which is about 6 million U.S., had been raised in the form of commitments by AMT just prior to the Bre-X fiasco. In a few short weeks those commitments had all disappeared. Currently, AMT is working diligently to raise the money to complete the full feasibility. AMT is a very successful company in it's own right and has raised millions in the past to develop projects and go on to successful production in many cases. Management is very confident in AMT's financing abilities and continues to advance the project. A trial heap leach is anticipated for mid 1998.
_________Welbar Gold Project___________( 50% Gold City )
This project is centered in the famous Cariboo Gold Fiels, 80 Km east of Quesnel, a major resource city, in Central British Columbia, Canada.
The project already has some defined resources, which are 38,000 tons @ 13 gpt Measured and Indicated and 25,000 tons @ 13 gpt Inferred. A centrally located modular 200 tpd mill is anticipated with ore being fed from various nearby deposits. The area is very well connected by thousands of kilometers of logging roads. This central mill idea is similar to the project concept of the Keystone and production can easily be ramped up by adding more modular mills. Management is very confident of adding reserves to the base and is undertaking a full feasibility. Assuming it is positive, beginning production in 1998. A central modular mill will cost in the order of C$5 million and operate for C$ 77.00 per tonne. Using an estimated ore grade of 13 gpt and a recovery rate of 94%, 28,700 ozs will be produced, realizing revenues of C$12,755,555.00 or pre tax net revenues of C$7,255,555.00. The company needs $1.5 million to bring this through full feasibility and another 3.5 million to build the mine and have working capital.
Financings are being pursued for both projects currently and volume has been picking up, possibly indicating something positive is in the pipeline. Also, No promotion has been done and is in the process of being undertaken now.
More information will follow on the company's other projects.
Rich Biscan |
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