New Jersey Mining Company announced today that it has closed a private financing and will use the funds to resume underground production at its Golden Chest Mine project near Murray, Idaho.
NJMC President John Swallow stated, “With our financing complete, we can now advance toward resuming operations at the Golden Chest Mine. After an anticipated six-month rolling start, we expect gold production of approximately 15,000 to 20,000 ounces over the following two years. With consolidated ownership, quality infrastructure, and the New Jersey Mill in-place, we believe we are exceptionally well-positioned to take advantage of rising gold prices.”
Mr. Swallow continued, “With a productive mine in a great location, and without the financial burdens of high initial CAPEX and/or greenfield exploration costs, we have an excellent head start in evaluating expansion at Golden Chest as well as other opportunities around the region.”
NJMC closed a private placement through GVC Capital LLC, whereby accredited investors have forward purchased 904 ounces of .999 gold at $935 per ounce, to be delivered or converted to cash at the investor’s option starting December 1, 2016 and quarterly thereafter, over two years as gold is produced from the Golden Chest Mine and New Jersey Mill. In combination with the previously announced subscription by Company management (through Ophir Holdings LLC) for 500 ounces of gold on the same terms, NJMC has sold forward 1,404 ounces of gold at its anticipated per ounce cost of production for total proceeds of $1,312,740.
The mine plan has a 3,000-tonne per month production target with all material to be processed at the Company’s nearby New Jersey Mill. The mine plan is focused on the main Skookum Shoot orebody which remains open down-dip with substantial exploration potential in other areas including up-dip and on-strike extensions.
Company management believes the Golden Chest property has district-scale production potential for the longer term, not only near the recently constructed mine, but in areas of past exploration and historic production. A compilation study recently integrated all available modern exploration data from the property and across the Murray area. This includes work by Cominco, Newmont, NJMC, Golden Chest LLC, and recent mine lessee Juniper Resources LLC.
NJMC recently announced that it is set to begin small-scale open-pit mining operations at the Golden Chest from a starter pit containing an estimated 13,000 tonnes of mineralized material with excellent potential for expansion. Open-pit mining this summer and fall is expected to generate cash flow while the underground mine workings are dewatered. See the NJMC news release dated June 21, 2016 for more details.