Producer Brigus Gold plans $59.5 million in capital works

Brigus Gold Corp plans capital expenditures in 2013 of $59.5 million at its two operations in the Timmins Mining District.

The company’s key asset is the Black Fox Complex, comprising the Black Fox Gold Mine and mill and its Grey Fox property.

Capital costs for 2013 are forecast as follows; $16 million (M) for underground development, $13M for open pit capital stripping and overburden removal, $20M for property plant, equipment and other capital items, and $10.5M for Grey Fox and Black Fox underground exploration.

Capital costs for the development of the Grey Fox mine will be outlined in the feasibility study scheduled to be released during the second half of 2013.

On Jan.7, Brigus announced record production levels of 22,672 gold ounces in the fourth quarter of 2012. The company finished the year within the guidance set on Feb. 21, 2012 of 77,000 – 85,000 ounces with a total of 77,374 ounces.

“We finished the year in a very strong position and are well poised for growth heading into the new year,” said Wade Dawe, Brigus chairman and CEO.

“Gold production increased each quarter in 2012, a trend that will continue into 2013 as we reach annual steady state production levels.”

The Black Fox mill processed 185,727 tonnes of ore at an average grade of 4.04 grams of gold per tonne and an average recovery of 94 per cent in the quarter. Throughput averaged 2,019 tonnes per day.

Other highlights included:

-Increasing gold production and decreasing cash costs

-Black Fox mine is cash flow positive and profitable

-Significant exploration upside and resource additions through a $10.5 million exploration program

-Strong management team with development, financial and exploration expertise

The company will release complete fourth quarter and year-end financial and operational results on March 28, 2013.

In 2013, Brigus will fund Black Fox and Grey Fox operations with internally generated cash flows. Mining operations will continue to be profitable and cash flow positive as gold production increases.

On Oct. 30, 2012, Brigus announced it had completed the previously announced $30 million bought deal debt financing. The financing was arranged by Casimir Capital for a finance structure fee of 2.77 per cent. The $30 million in senior secured debt notes were secured by a lien against the company’s Black Fox Complex and the Goldfields properties with a three year term.

Brigus controls a total contiguous land package of 18 sq. km of the mine and adjoining Grey Fox-Pike River project.

This strategic land package includes 6.5 km of strike of the well-known Destor-Porcupine Fault Zone (DPFZ). The DPFZ is a major east-west trending, fault system of the Pre-Cambrian Abitibi Greenstone Belt and together with its numerous splays are associated with many past and current producing gold mines of the Timmins Gold District.

At the Black Fox, both the open pit and the underground mine are in commercial production, starting respectively in May 2009 and October 2011.

Since Brigus took ownership of the Black Fox Complex in June 2010, the company has strived to make the necessary improvements to support increased production and ore grade control.

The Black Fox property has also proven to be a source for new gold discoveries. The 147 and Contact Zones are located four kilometres southeast of the operating Black Fox Mine and hosts more than 50 per cent of the resource on the Black Fox Complex.

On Jan. 9, the company reported results from its ongoing drilling program at the 147 Zone on its Grey Fox property include high grade intercepts of 14 grams per tonne over 35 metres and 4.7 grams over 29 metres.

Brigus senior vice president exploration Howard Bird said “these impressive drill hole intercepts are among the best returned from the 147 Zone. These results extend the ore body to a true vertical depth of 300 metres below surface and most importantly the zone remains open for further expansion.”

In conjunction with increased production levels and ongoing exploration, the company has successfully completed an initial expansion of the Black Fox mill.

The expansion increased the processing capacity at the mill by 10% to 2,200 tonnes per day through optimization of existing mill equipment, adding leach tank capacity, and elimination of production losses.

The Black Fox mine and mill are located in the Township of Black River-Matheson. The mine is approximately 75 kilometres (km) east of the City of Timmins and 11 km east of the community of Matheson.

The mill is located approximately 31 km west of the mine, off Highway 101.