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Gold miner upbeat about Blackwater

If the gold exploration holes dug into Mount Davidson were lined up end to end, they would cover the distance from Prince George to Lac La Hache. The mountain south of Vanderhoof and west of Prince George is the site of NewGold Inc.
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If the gold exploration holes dug into Mount Davidson were lined up end to end, they would cover the distance from Prince George to Lac La Hache.

The mountain south of Vanderhoof and west of Prince George is the site of NewGold Inc.'s Blackwater gold project. It was the most aggressive mineral exploration program in B.C. last year, and company officials believe they were tops in all of Canada, drilling 260,000 metres of core samples to pinpoint where the boundaries are of the gold they know for a fact is under the ground there.

"It will be the biggest gold operation in the history of B.C.," said NewGold CEO Bob Gallagher, who is well aware of the province's rich history of gold mining. "There is a lot of it [at the Blackwater site], but it is not the highest grade ore so we have to be very efficient at our work. With the anticipated gold prices ahead in the next several years, and the volumes we calculate to be there, this will be our flagship operation producing more gold than our other four operations combined."

NewGold also operates the newly opened New Afton Mine just outside Kamloops city limits, the Mesquite Mine in California, Peak Mines in Australia and the Cerro San Pedro project in Mexico. All are producing gold plus other minerals. Blackwater and their El Morro site in Chile are both in the early stages of environmental assessment.

"Since November we were officially in the provincial and federal environmental assessment system," said NewGold's director of environment Tim Bekhuys. "We intend to file [environmental assessment documents] at the end of this year, anticipating it will likely be a two-year process. Our hope is to be into the construction phase in 2015."

It feels like a construction site already, at the top of Mount Davidson. About 400 people are living and working there, in a state of the art camp designed for comfortable living in a deep wilderness zone. So far all the workers are there for exploration's many duties - from drilling to preliminary core sample analysis to geology to mechanical maintenance and many more jobs just to establish if a mine should eventually be built.

At the peak of exploration, 19 rigs were drilling core samples but that is now slowing down to about four rigs during 2013. It is a cycle that is ending, making way, pending environmental licensing, for the construction cycle to build the mine buildings and other facilities, which will end in favour of the mining itself.

"Roughly $130 million was spent last year," said Gallagher. "In my early days in this industry, that how much you'd spend to build the whole mine. Today, that's just the bill for the exploration program. I am happy to say that about 70 per cent of that amount was spent in the local economy - Vanderhoof, Prince George, other communities in this area."

These are the places where open houses will be held in 2013, to gather public input and explain NewGold's processes to the community at large. Dates have not been scheduled but Gallagher said they would exceed the government's minimum required number of these meetings. Four were already held in local towns this past autumn.

"We have had issues brought to our attention and we are happy to address those," he said. "If you feel yourself thinking about 'spinning' an issue, that is usually a signal to yourself that you should be doing things differently in the first place. It's a sign for your own awareness of potential dishonesty...We have overwhelmingly heard a lot of public and First Nations support for this project."

They have even won some awards to back that claim up. The most recent was the Northern B.C. Prospector or Developer of the Year trophy at the B.C. Natural Resources Forum held in Prince George earlier this month.

"It's nice," Gallagher said. "We try to tell people we're nice guys, as a company, that we believe in core community values and strive to live up to them, but these awards show it is not just talk. We really are doing business that way."