Sutter Gold Places Lincoln Mine Project on Care and Maintenance

Sutter Gold Mining Inc. (TSXV:SGM,OTCQX:SGMNF) yesterday announced plans to put its California-based Lincoln mine project on care and maintenance. Though the mill has processed about 1,000 tons of stockpiled material, it ultimately failed to get through all the material due to “weakness in the design and installation of the plant thickener.” Milling operations were suspended at the end of February due to the “inability to dewater tailings.”

To correct those and other issues, the company requires an estimated additional investment of $1.1 to $1.2 million.

As quoted in the press release:

Given completion of the planned underground development and the inability to continue processing stockpiles as planned, the decision has been made to place the Project on care and maintenance to conserve resources. As a result, the mining contractor has been demobilized and non-essential personnel, principally mill labor, have been laid off. A work program is being finalized for recommendation and will require approval by the Company’s Lender, RMB Australia Holdings Limited, for continued funding. This program anticipates continuing work to complete an optimized mine plan for the initial 12 to 18 months of production from the Comet deposit and update of the life of mine plan as appropriate. It is planned that once completed the mine plan will be provided for independent review and input by a third party engineer. Likewise with the mill, it will be recommended that a third party review be undertaken of the Company’s assessment and costing of the remaining elements required to achieve production ready status. Completion of this work will position the Project to move to commercial production pending additional funding.

Rick Winters, Sutter’s president and CEO, commented:

It is unfortunate that despite our best efforts we could not overcome the design and installation issues that resulted in the failure to achieve our objective of processing all our stockpiles and completing the mill commissioning. There is no sense operating the mill and incurring additional costs until we have addressed the issues we know preclude efficient commercial processing.

Click here to read the full Sutter Gold Mining Inc. (TSXV:SGM,OTCQX:SGMNF) press release.