Goldsource Mines (GXS.V) has announced it has started the construction activities at its low-cost Eagle Mountain gold mine in Guyana. The construction of the plant will happen in Vancouver where after it will be shipped to Guyana by the end of the third quarter. However, as the customs in Guyana sometimes work terribly slow we are expecting some delays in the company’s time line and think H1 2016 is a more safe bet to expect a meaningful gold production.
The company is fully permitted and fully financed for the $6M capital expenditures and as it expects to produce approximately 21,000 ounces of gold per year from years 2-7 at a cash cost of $480/oz, the initial stage of the Eagle Mountain project will provide Goldsource mines with some cash flow it will use to continuously expand and improve its operations and to add new projects to the company’s portfolio as this definitely is a buyer’s market.
Goldsource could be a very interesting company from here on and weaknesses in the share price could be seen as a buying opportunity as we consider Goldsource’s management team to be one of the best in the sector.
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Disclosure: The author holds no position in Goldsource Mines. Please see our disclaimer for current positions.
