Eskay Creek Mine, ran by Barrick Gold Corp, was until its closure in 2008 Canada’s highest-grade gold mine and the world’s fifth largest silver producer.  

Now North Bay Resources, Inc (OTC: NBRI) acquires a parcel of land adjacent to it. Why would NBRI buy land along the entire northern boundary of the closed mine? This is literally a billion-dollar question. (And yes, it’s not a typo, since we’re talking about billions of dollars).

It is very possible that, based on British Columbia government records documented in BC MINFILE 104B 008, the land adjacent to and north-northeast of the now-exhausted Eskay Creek Mine contains high-grade layers of gold and silver in the amounts sufficient for commercial production.

How profitable can such production become? In a nut-shell – highly profitable. The average grade of the Eskay Creek Mine resource was  48.4 grams per tonne gold and 2221 grams per tonne silver. To put these numbers in perspective, a mine can be profitable with grades ten times lower than those of the Eskay Creek Mine.

Of course, grade alone does not give an entire picture. A more significant piece is cost per ounce, which is a combination of grade (grams/tonne) and operating costs (USD/tonne). In 2005, the Eskay Creek Mine’s cost per ounce was USD 350 while the average cost worldwide was USD 428 and rising.

We believe that NBRI will be able to maintain below-average cost per ounce by mining high-grade deposits as well as by using Eskay Creek Mine excellent infrastructure that’s already in place. 

Considering all this, it looks like NBRI has successfully secured another strategically important property.

International Monetary Position Disclosure

International Monetary maintains a position in NBRI and is being compensated by NBRI via a combination of cash and restricted stock for its investor relations and market awareness services. Read full position disclosure and safe harbor statement.

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