This puts some perspective on the value of Skaergaard: In 2004 the mining company Crew Gold Corporation (“Crew”) was granted a licence to exploit the gold deposit at Nalunaq. The license covers an area of 16 km² around the mine site. Production commenced in mid-2004 and continued until the end of 2008. Over the period, Crew produced 308,000 ounces of gold. They operated the mine with sub-contract miners from Canada and, as they had no licence to process on site, they shipped mined ore to Newfoundland for processing. Rising oil prices and shipping costs made the economics progressively more difficult. A New Beginning Angel Mining (Gold) A/S (“Angel”), a wholly owned subsidiary of Angel Mining plc, purchased the Nalunaq mining assets in July 2009 for US$1 million and are now due to pay a further US$500,000 to complete the acquisition of the mine, which could not take place until the company had received formal approval of the Greenlandic government, which was confirmed in late September. Assets acquired include mining equipment, a fully operational mine camp and ship loading harbour facilities located close to the town of Nanortalik at the southern tip of Greenland.
So a recently operational gold mine in south Greenland sold for $1.5m. Since 2004, an established mining school (more than 10 years old) would allow more use of Greenland labour (entire population 55,000) which is always a positive. Also Skaergaard does have an airstrip so if the Govt allowed on -island processing (probably a big "if") gold and palladium could be flown out. So mining in Greenland presents unique challenges. I hope the scoping study includes detailed discussions with the Greenland government. ATM, Skaergaard is worth little, irrespective of the amount of money PGM spent on it. There's gold (and palladium) at the end of the rainbow; but how to climb that rainbow. (I think the company PGM brought it from wrote off more than $100m on Skaergaard.) I am not being negative, just realistic.
PGM Price at posting:
7.3¢ Sentiment: Buy Disclosure: Held
