Is history boring and irrelevant to the future? Not at all, as Heritage Mining (CSE: HML, FSE: Y66, WKN: A3DTM6) is well on its way to demonstrating that the legacies of the past can be transformed into positive cash flow in the near future. Investigations were conducted on the waste rock piles of the historic Split Lake Mine. Soil samples taken showed average gold grades of approximately 3.72 g/t.
The historic Split Lake Gold Mine is a central component of the Drayton Black Lake Gold Project in northwestern Ontario, Canada, in two respects: on the one hand, historic mines indicate mineralization that was considered sufficient for economic mining in earlier times.
It stands to reason that mineralized zones were overlooked—either because they were not high-grade enough to be mined economically at the prices of the time, or because they were not recognized at all due to the limited exploration methods of that era. Therefore, historic mines are always a good reason to take a second, more in-depth look at the respective properties. Heritage Mining has been doing this for some time now.
Will Heritage Mining turn the waste of the past into money in the future?
The company therefore also turned its attention to the waste rock piles accumulated in the 1930s. These are not just disruptive legacies of historic mining; they could prove to be true sources of revenue. Often, these piles still contain a significant portion of the metals mined at the time. They could not be extracted from the ore because the metallurgy of the day did not yet allow for it. Today, however, thanks to improved metallurgy and processing technology, it is possible to recover a large portion of these metals.
These technical improvements turn the waste of the past into a potential source of money for the future at many historic mines. Heritage Mining was therefore well-advised to include the waste rock piles of the historic Split Lake Gold Mine in its geological exploration. For this reason, a total of 26 soil samples were taken from the pile over the past few months.
They showed gold values ranging between 0.009 and 27.0 g/t. This results in an average gold grade of approximately 3.72 g/t. 5,000 tonnes of ore with around 3.72 g/t gold directly on the surface, which no longer needs to be mined, sounds interesting and certainly justifies further investigation of the pile.
Waste rock piles from several historic mines promise consistent cash flow
However, the Split Lake Gold Mine is not the only historic mine on the Drayton Black Lake project with an interesting waste rock pile. The pile at the Alcona Mine is even larger. Its mining waste is currently estimated at around 40,000 tonnes, and samples taken last year also showed attractive gold grades. In 20 of the 30 samples taken, Heritage Mining was able to detect gold grades ranging from 0.006 to 4.1 g/t. This corresponds to an average gold grade of 0.53 g/t. Thus, about half of the pile here also shows gold grades high enough to justify further investigation.
When one considers that Heritage Mining has a fully permitted mill available, ready to accept the ore from the piles for processing, the various pieces quickly come together to form a coherent and extremely attractive overall picture. Current prices for gold, silver, and other metals are high enough to allow for the profitable processing of ores even with low gold grades. Since the available processing facility is already permitted, it can be brought back into production relatively quickly and with only a small capital expenditure.
As soon as the reprocessing of the ore piles has begun, Heritage Mining will have a stable cash flow. Further investigations will show how high this cash flow could be. However, it is already apparent today that Heritage Mining can use this money to cover at least part of its exploration expenses. For invested shareholders, this means that the mandatory capital increases will be significantly smaller, as part of the intended expenditures can be financed with the available income.
