VANCOUVER (miningweekly.com) – Junior mine developer Barkerville Gold Mines (BGM) will start immediate development and mining of the Bonanza Ledge deposit, at Barkerville Mountain near Wells, British Columbia, after completing the permit amendment process mandated by the provincial Mines Act.

The TSX-V-listed company expects to start processing ore by July.

Bonanza Ledge mineralised material will be transported by road and processed at BGM’s 100% owned QR mill facility, located 110 km from the deposit. The mill and tailings facilities are currently permitted and operational. The Bonanza Ledge mine is permitted to produce up to 150 000 t/y.

“This initial production is important to our growth plan in the Cariboo gold project. In addition to generating positive cash flow, this underground operation allows BGM to train a local workforce and gain expertise in mining and processing in the district. This experience will assist in the development of other deposits in the camp and the eventual construction of a new centrally located processing facility. In conjunction with this production, BGM’s aggressive exploration programme continues and will eventually lead to a property-scale mineral resource estimate,” president and CEO Chris Lodder said in a statement.

Barkerville has a two-pronged business plan based on existing resources at the Bonanza Ledge mine and the larger exploration potential of the Cariboo District.

The short-term objective is to reinitiate underground mining at Bonanza Ledge and then add further production life from mineralisation identified nearby on the British Columbia vein. It is targeted to produce about 30 000 oz/y of gold. This production is expected to be profitable and assist in covering ongoing costs of exploration and advanced studies; build an in-house work force and allow the company to increase its knowledge of mining these deposits to successfully reach the longer-term objective.

The long-term goal is to develop the other targets in the Wells-Barkerville area and a new near-site ore processing facility that would accommodate a more robust mine life asset at a capacity and quality that would create significant returns. The company plans to release a new resource statement in late 2017 that will form the basis for a feasibility study for this objective. Barkerville expects to complete the feasibility study by the end of 2018, which would justify investment in the mine and processing facility.

BGM has attracted about C$55-million in new investment since the start of 2015 and now has a technically and financially supportive major shareholder base consisting of Eric Sprott (19%), Osisko Mining (17%) and Osisko Gold Royalties (16%).