International Tower Hill Mines, which already more than 13-million ounces gold in resources at its Livengood project in Alaska, aims to have the mine in production by 2016, CEO Jeff Pontius said.
Shares in the company have risen more than 50% since September 30, and were trading at around C$10,07 on Wednesday afternoon, giving the firm a market capitalisation of C$855,4-million.
There is growing interest in the company, from other gold miners, as well as investors that are "looking for the next Osisko Mining, the next Detour Gold", amid record bullion prices, Pontius said in an interview.
Both Osisko and Detour found large gold deposits in Canada and saw their values grow significantly as they moved closer to development.
The Livengood asset does appear to be in the same class as the other two projects, Dahlman Rose & Co analyst Adam Graf said in an interview.
"This is a big deposit; it's one of just a handful of very large gold deposits out there held by juniors."
As ITH puts out more information about its plans for the project, "people are starting to get it", which is positive for the share price, Graf commented.
PAULSON, ANGLOGOLD
ITH has been helped in recent months by a stream of good news – the company published a preliminary economic assessment, closed a C$105-million financing in November and announced this month it has awarded key contracts for a prefeasibility study at Livengood. It has also published positive high-grade drilling results.
Paulson & Co participated in the offering and had a six percent stake in ITH as of November 30. Other big shareholders at the same date included Tocqueville Asset Management with 13,7% and South African gold major AngloGold Ashanti, with 11,3%.
ITH bought the Livengood project and some other asset from AngloGold in 2006.
The money raised in the offering will take the company through prefeasibility, feasibility and permitting on the Livengood project, Pontius said.
The firm has also been adding people with mine development and permitting experience to its team over the course of the year, and that is being recognised by the market, Pontius said.
Looking ahead, ITH expects to publish a new, likely increased, resource estimate in the next couple of months, followed by the prefeasibility study in the third quarter of 2011.
The current 13,3-million ounce total resource at Livengood is at a 0,5 g/t cut-off grade.
The next two and a half years will be spent on permitting and the completion of a feasibility study, with the target of having a permit in hand and being ready break ground in 2014, to allow for the first gold production in 2016, he said.
The project is located near a paved highway, will use grid power and the company does not expect any significant permitting issues, based on baseline studies done so far, Pontius said.
'KICKING THE TIRES'
ITH had as many as 14 confidentiality agreements signed with other parties interested in the company and its assets by mid-May this year, Pontius said.
By that point the firm was getting "a little nervous", so it cancelled all the agreements and developed a new, more restrictive confidentiality agreement, that deterred some parties but means that the ones still in the game are genuinely interested, he said.
The company has since signed about six or seven new agreements and the list includes a "good mix" between majors and mid-tier companies, Pontius said.
"There's lot's of people looking and kicking the tires on this project right now."
Dahlman Rose's Graf said that the Livengood asset could be interesting for companies looking for acquisitions.
"Any of the majors looking to secure an asset that looks to be substantially sized and fairly low risk," might look at it, he said.
AngloGold's interest in the company means that it would have "a seat at the table", but the 11% is not a blocking stake, he commented.
But Pontius emphasised that the company is not sitting around waiting for something to happen.
Besides moving Livengood forward, the company could also look at becoming an acquirer itself, he said.
"We're trying to build a mining company here and immediate production is important. There's some opportunities out there that we've looked at that look encouraging for us.
Source : stone crusher
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