North Bay Resources Inc. (OTC:NBRI) earlier this week said it has begun generating gold from its Fran project in British Columbia, with early cash flow expected as shipments ramp up through the company's Bishop Gold Mill.
The company told investors that initial trenching has returned high-grade surface assays, with mineralisation expanding across multiple directions and increasing with depth. CEO Jared Lazerson said the ore includes chalcopyrite, galena, and silver, and described it as "highly mineralised" and easily traceable.
Proactive: You've just completed initial test mining. What do the high-grade assay results tell you about the potential of the massive sulfide zone, and how confident are you in its scalability?
Jared Lazerson: This project has been around a while. We've taken a new lens to it—both in terms of the broader resource and more specifically since we own the 100-ton-per-day Bishop Gold Mill. We're looking for high-grade feedstock at the surface oxide zone. In trench B and trench C, which are about 60 metres apart, there have been up to multi-ounce assays.
We knew it was a good area. While doing a little reconnaissance in June, we found a massive sulfide rock outcrop between the trenches—indicating continuity. We assumed it was there because of similar ore in both trenches. Last month, we began opening it up.
It’s open towards trench B to the east, trench C to the west, into the hillside to the north, and particularly at depth. Mineralization seems to grow at depth. That may reflect oxidation; the first metre or so is oxidised.
In terms of that specific area, things are looking very good—mainly in terms of grade. The ore is highly mineralised. I've really never seen anything like it. It’s not a traditional quartz-type gold deposit. It’s more chalcopyrite, grey with quartz veins. There's also galena and silver. It’s easy to see and follow the ore. It expands in all directions except to the south, which we knew already from previous assays.
So, things are looking very good in terms of small-scale, high-grade surface operations giving us feedstock to go to the mill. We're very pleased with the last few weeks and that initial test pit that we opened up at Fran.
What are the next steps in the development timeline? How quickly could you see early revenues?
We'll see revenues immediately from this. Our mill is up and running. We've produced some gold there. This is high-grade ore. The basic numbers are: consistent grade at a half-ounce or better, with 20% recovery loss and 20% dilution. That puts us at around $1,100 per tonne. Our all-in cost is about $400 per tonne, mainly transportation. It’s just under $300 per tonne to get it to the mill.
Our processing cost is mostly electricity and some labour. Mining is also mainly labour. So we’re looking at a $600 profit per tonne after refining costs. We'll probably start truckloads at the end of the month, maybe into September. We're aiming for 66 tonnes a week—three truckloads—though it might end up being two. That would mean about $75,000 in gross revenue weekly. Not huge mining numbers, but substantial cash flow.
This will finance the company. In the bigger picture, we’ll move to a 10,000-tonne test permit—that’s almost a year’s worth of mining given seasonality. That’ll let us extract more high-grade ore. We don’t know yet if it’s 10,000 or 100,000 tonnes.
The greater resource is very large. The core main zone is 20 million tonnes. The east zone is 40 million tonnes—essentially a whole mountain. That means moving to a 1 million to 2 million tonne processing capacity, building a mill, and becoming a mid-tier producer.
That process would start about a year from now, once the bulk sampling and engineering work is done. Then we’d move toward a large mine permit. We appear to have the resource to support that.
We’d be looking at potential profits of $50 million to $100 million, though we don’t have hard numbers yet. Nearby mines have $60-per-tonne costs. Blackwater, the largest new gold mine in North America, has costs of $9 per tonne. On a large scale, we could go as low as a third of a gram in grade.
That’s still on the drawing board. But for now, the focus is the high-grade ore. It’s a dual-path strategy. It’s nice to have the high-grade mine giving us initial cash flow, so we’re not stuck in endless dilution—which is the death knell of many exploration companies.
Quotes have been lightly edited for style and clarity