Gambling on the Golden Chest
| December 29, 2010 8:00 PM
With a new partner pledging to back a gamble, the New Jersey Mining Company is set to pull the lever of the Golden Chest Mine slot machine, hoping to see symbols of that precious ore line up across the screen.
"That's about right, except we're reading the slot machines and picking which levers to pull," said Jim Frank, chairman of Marathon Gold Corporation.
NJMC and MGC, one of Canada's newest gold resource development companies, have come together to buy out the former owners of the Golden Chest and create Golden Chest LLC to prospect in the region's highest historically producing gold mine.
Gold was initially discovered at the Golden Chest in the 1890s. Soon after prospectors began to dredge a nearby river and a succession of attempts at hitting the mother lode followed leading to the present. NJMC and MGC are willing to bet the mine has kept her secrets hidden in the depths.
"A lot of times it will be the third or fourth group that is finally successful," said Frank. "There's gold there, there's no doubt about it - 65,000 ounces have already been mined out."
According to a press release published at www.silverminers.com which summarizes the venture, if there is an abundance of gold yet undiscovered in the depths of the Golden Chest, MGC has the ability to find it.
"Marathon's focused and low-cost approach to resource development and exploration has an established record of delivering rapid growth," states the release.
Not only does the company have an "established record," it has the funds and ambition to go down to get it.
"In the next year we're going to put $4 million into the exploration," said Frank. "If we're successful we'll put another $4 or 5 million into it and then make a decision on whether or not to open a mine."
If both exploratory missions produce adequate results, further investment involving an upgrade to a full scale mining operation will skyrocket, said Frank.
Vice President of NJMC Grant Brackebusch said the Golden Chest LLC will commence probing the depths promptly at the beginning of the new year. Results are expected to be published in the second quarter of 2011.
"Is there enough quantity and quality to put in a mine?" said Frank. "That what we're going to spend the money on - it's a pretty big risk."
There may be some wagering going on but the companies are laying their money out on the table based on two facts. The mine has produced a substantial amount of gold over the years and previous operations have, in relative terms, only scratched the surface of the claim.
"We think it's a good bet," said Frank.