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The delivery marks the beginning of cash flow and revenue generation for Gold Mountain.

The material was mined from the 1300 vein near the historic Pit 2, which was last mined from 2012 to 2014 at an average grade of 16.7 g/t.

"Since purchasing the project from Equinox, our primary focus has always been putting the mine back into production. When going public in December of 2020, we had a goal to restart the Elk and develop a million-ounce producer. We are very pleased to deliver this update to our loyal shareholders. The Elk project has always been an execution story and I'd like to thank all those involved in bringing the Elk Gold mine back to life,” commented CEO Kevin Smith.

According to the preliminary economic assessment, the mine will produce an initial 19 000 oz/y, ramping up to 65 000 oz/y in year four.

In terms of the agreement with New Gold, Gold Mountain is paid based on the value of ore delivered and bears no risk of processing recovery. By selling high-grade ore directly to New Gold, the company avoids the need for an on-site mill and tailings storage facility, and reduces the Elk mine’s environmental impact.

Under the terms of the ore-purchase agreement, Gold Mountain will deliver 70 000 t/y of high-grade ore, or about 200 t/d, to New Gold. The company has signed a letter of intent with New Gold to increase its tonnage delivered to New Afton to 350 000 t/y, beginning in year four.

Looking forward, Smith said Gold Mining planned to ramp up high-grade ore delivery to New Gold, continue aggressively drilling out its highly prospective land package, and kick off the technical work necessary for the proposed Phase 2 production expansion.

Equinox sold the Elk mine in 2019.