A Quebec gold mine developer is opening negotiations with the Ontario Northland Railway to reach a freight rate on hauling ore to Timmins for processing.
Montreal's Monarch Gold has entered into a memorandum of understanding (MOU) with the Crown-owned rail carrier to negotiate the transport ore from its Wasamac gold mine project in western Quebec to the Kidd concentrator.
Monarch is looking for toll processing options at mills in northeastern Ontario and western Quebec.
Ontario Northland Railway's line runs directly past Monarch's Wasamac gold deposit and ends is route in Rouyn-Noranda where there's an interchange with CN.
The Wasamac deposit is 15 kilometres west of Rouyn-Noranda.
The company said the first phase of the agreement consists of an economic study on the infrastructure for the transportation of ore from Wasamac to Kidd, to be completed no later than December 31.
"This is another important step in the development of our Wasamac gold project with respect to the custom milling option, the objective of which will be to negotiate a favourable rate for the transportation of Wasamac ore to the Kidd concentrator," said Monarch president Jean-Marc Lacoste in a July 9 news release.
"Ontario Northland has the necessary capacity, a solid reputation and has been providing this transportation service to mining companies for more than a century. It is important to remember that if we choose the custom milling option, we will be able to significantly reduce the construction costs of the Wasamac mine compared to the initial option of building the mill and tailings facility directly on site, in addition to reducing the impact on the environment and neighbouring communities.
"The other important aspect will be to ensure that our operating costs are as low as possible, including transportation costs, which will allow us to increase the profitability of the project."
If goes well, the first rail cars from Wasamac could conceivably arrive in Timmins by December 2023.
In mid-May, Monarch signed an MOU with Glencore for the potential use of Kidd. Monarch Gold has retained an engineering firm to do an upgrading study on the Metallurgical Site (Kidd Met).
Should both companies agree these upgrades are in each other's interests, Monarch and Glencore will negotiate a toll milling agreement.
Monarch would also agree to fund upgrades to the concentrator and any related infrastructure.
The Wasamac deposit has a measured and indicated resource of 2.6 million ounces of gold, including proven and probable reserves of 1.8 million ounces of gold. Annual average gold production is pegged at 142,000 ounces over 11 years.
