Merc revives Colomac gold mine in Canadian NWT

Merc says the open-pit mine, which historically produced over 500,000 ounces of gold, presents good opportunities since mining was limited to a 200-metre depth and only one of five known deposits was developed.

The mine 220 kilometres northwest of Yellowknife has opened and shut down twice over the past 22 years under two sets of owners, reports the Financial Post:

(It) started operations in 1990 under the management of Neptune Resources before being shut down one year later due to unfavourable gold prices. It reopened in mid-1994 under the control of Royal Oak Mines. Three years later, the mine closed and Royal Oak sought bankruptcy protection.

In late 1999 control passed to the government.

In 2007, the government hired Deloitte & Touche to drum up some interest. But nothing happened, in large part because of the low price of gold and the considerable clean-up work required at the mine. About six months ago, Merc — whose largest shareholder is Goodman & Co. Investment Counsel with a 18.53% stake — started discussions with the government (specifically Aboriginal Affairs and Northern Development Canada) about buying the claims and leases.

Merc says it has engaged a consultant to prepare an NI 43-101 report on the mine for early in the new year. The company is currently doing step-out drilling at its other project, the Indin Lake property also in the Northwest Territories.