Coastal Gold will be Acquired by Sulliden Mining Capital: Fast-Track Development Planned for Hope Brook Gold Project, Newfoundland

By Dr Allen Alper and Allen Alper Jr.
on 3/16/2015
On March 2, 2015, Sulliden Mining Capital announced the acquisition of Coastal Gold. This will combine the promising Hope Brook Gold property of Coastal Gold in southwest Newfoundland with the robust financial resources and experienced technical team of Sulliden Mining Capital. At PDAC, we spoke with Dr. Bill Pearson, who is a well-respected geologist with a record of substantial gold discoveries. He discussed Coastal Gold’s (TSX: COD) newly defined underground resources at their Hope Brook Gold Project. Sulliden Mining Capital’s intention is to commence a feasibility study immediately on the project. On March 2, 2015, Dr. Bill Pearson, P.Geo received the 2015 Prospectors and Developers Association of Canada (PDAC) Distinguished Service Award.

Quotes from news release of March 2, 2015 “Sulliden Mining Capital to Acquire Coastal Gold “

“Dr. Bill Pearson, President and CEO of Coastal Gold, commented, "We are very pleased with the Sulliden agreement, which will provide the necessary funding as well as access to strong corporate and engineering teams to move the Hope Brook Gold project forward. Coastal Gold shareholders are receiving fair value and will be able to participate in the upside of Hope Brook through their Sulliden shares. I look forward to working with the Sulliden team to advance Hope Brook and to realize the full exploration potential of this extensive but underexplored gold mineralized system."

Peter Tagliamonte, P.Eng., Director and former Chairman of Sulliden Gold Corporation, commented, "This acquisition represents a great opportunity for the shareholders of both Sulliden and Coastal Gold. By leveraging the exploration success of Coastal Gold's excellent geological team, and Sulliden's strong technical and engineering team, we feel that the Hope Brook Gold Project can quickly be advanced to a production decision stage. Our intention immediately will be to advance the engineering side of the Hope Brook Gold Project."

Justin Reid, President and CEO of Sulliden, commented, "For many months our team has been actively evaluating and visiting global mining projects. Hope Brook proved to be the most accretive for Sulliden. The project met all our criteria with its mining-friendly jurisdiction, its stage of development and the excellent mineral growth potential. With our financial resources and the focus of a proven team, we believe that the fast-track development of this project will generate tangible short and long term value for our shareholders."

Dr. Bill Pearson Discussion:

Bill Pearson, President and CEO of Coastal Gold (TSX: COD), spent some time with the Metals News team at PDAC 2015 discussing the exciting development potential of their Hope Brook Gold Project located in Newfoundland.

Dr. Bill Pearson commented, “In January, we released a new high-grade underground resource for the deposit. We had previously looked at developing an open pittable resource when gold prices were in the $1500’s, however at current prices, we had to rethink our plan.” In response, the company altered the way they looked at the resource and came up with an innovative solution. “We decided to redo our block model. We resized our blocks from five to three meters wide and focused on the higher grade resource. We issued the results on January 12th – and the results were very encouraging. We have indicated at 5.5 million grading 4.77 grams per tonne containing almost 850,000 ounces, and an inferred resources of 840,000 tonnes grading 4.11 grams per tonne containing about 110,000 ounces. We believe this resource gives us a better definition to base a PEA study on.”

“Previously we had looked at a combined open pit and underground project, however we are now looking to develop Hope Brook solely as an underground operation,” said Dr. Pearson. Due to the former producing underground mine at Hope Brook, the company has access to a high level of infrastructure. Dr. Pearson commented, “We have good infrastructure on the site, including a ramp that goes down to 350 meters below the surface. We have tailings ponds, an airstrip and a road network, and we are also in a really good mining jurisdiction in terms of both support from government and from local communities. We think this new approach will give us the opportunity to jump-start the project.”

This new strategy has renewed interest from the market for the project. Dr. Pearson commented, “The gold market is still tough, however as a result of our good underground resource and our development repositioning, we have a lot more people talking and showing interest in the project.”

Pearson has a great deal of experience with projects that are similar to Hope Brook. He said, “What I’m hoping to do is to repeat what I did with Desert Sun when we caught the upswing in the gold market. I think this year is very similar to 2002 when we started to get Desert Sun going. The end of March is the 10th anniversary of the first gold pour at Jacobina for Desert Sun. That is quite a significant achievement.” Jacobina has had a long mine life and Pearson is encouraged by what he sees happening in that deposit. He said, “I said when I started there that this mine will go for twenty to twenty five years or more and it is halfway there. I feel the same way about Hope Brook and I look forward to moving the project forward with the Sulliden team.”

Pearson is confident in the long term potential of Hope Brook. He said, “The exploration potential here is excellent. It is very underexplored and we know from the science that we have been doing that the deposit is much larger than people thought previously. You have to be somewhat of a contrarian in this business. I’m motivated by what I see in the system and the potential and what I see in the science, the people and the infrastructure.”

Sulliden has indicated their intention to proceed immediately with the completion of a PEA on an underground mine scenario. Dr. Pearson commented, “I think there is very good potential to develop a positive PEA on the new underground option.” With a mine design that is similar to the past producer on this historical site, Pearson feels that it will not be difficult to move the project into production. He said, “There is definitely potential here for a shorter path to production because you would be permitting a new mine that has the same footprint as the old one. There is very strong regional support, and we will have access to a world-class workforce in Newfoundland. This bodes well for our potential. We have a lot of work to do, however the agreement with Sulliden will provide the necessary financial support, and it will also combine Coastal’s geological team with Sulliden’s engineering team to fast-track the project forward. I’ve been fortunate to work on the Jacobina Mine in Brazil which was sold to Yamana for $735M, and then Central Sun in Nicaragua which was sold to B2Gold - now a $2 billion dollar company. I’m going for my hat trick here. I proved everyone wrong on the first two and I hope to do it again. I’m one of the largest shareholders of Coastal with 10 million shares. I have a lot of skin in the game and I’m quite committed. I’ve helped out the company through the long haul to get it done.”

Disclosure:
The Alper family owns Coastal Gold stock.

www.coastalgold.ca
Coastal Gold Corp.
Tel: 416-861-5899
info@coastalgold.ca

www.sulliden.com
Sulliden Mining Capital Inc.
Tel: 416-861-5805
info@sulliden.com