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Goldsource Mines Inc






Goldsource Mines Inc is a Canadian resource company that is progressing its advanced-stage, 100%-owned Eagle Mountain Gold Project, located in Guyana, towards initial staged production in Q1 2016. Goldsource is led by an experienced management team, proven in making exploration discoveries and achieving project construction on time and on-budget.







Guyana-Eagle Mountain



Goldsource Mines Inc is working aggressively to develop its advanced-stage, 100%-owned Eagle Mountain gold project towards low cost, Phase I production in H2 2015. The project has an existing NI 43-101 resource of 188,000 Indicated and 792,000 Inferred gold ounces (effective date November 21, 2012), with strong potential to expand its resources. A Preliminary Economic Assessment  has been completed which sets out the economic parameters for the project’s development. On December 30, 2014, the Company completed a $7.1 million equity financing, enough to conclude Phase I of project construction. Eagle Mountain is located in Guyana, South America, a mining-friendly, English-speaking jurisdiction with stable democracy based on British law.



Goldsource is led by an experienced management team, proven in making international exploration discoveries, financing, achieving construction on time and budget, and fast-tracking production.



Fully Financed for Phase I Project Construction



In December 2014, Goldsource concluded a non-brokered private placement for a total of $7,070,725 through the sale of 47,138,166 units at a price of $0.15 per unit.  Each unit consists of one common share and one-half of one common share purchase warrant of Goldsource, with each whole warrant being exercisable for one common share of Goldsource at a price of $0.25 per share for a term of 3 years.



Proceeds from the private placement will be used to fund all development and capital costs for Phase I mine and processing plant construction for the Company’s Eagle Mountain Gold Project.  Based on the PEA dated September 12, 2014 and filed September 16, 2014 on SEDAR at, the Phase I development consists of initially a 1,000 tonnes per day open pit – gravity plant ramping up to 3,000 to 4,000 tonnes per day (phased approach) for an 8 year mine life, with estimated preproduction capital costs of US$5.9 million and cash operating costs of $480 per ounce of gold. The Company is debt-free, as of December 31, 2014.



“This financing will provide Goldsource with sufficient funds to complete the Phase I mine development and place the Eagle Mountain Gold Project into production.  Sustaining capital and future expansions are intended to be paid for through operating cash flow. The project has additional development phases outlined in the PEA to increase production once initial success in Phase I is achieved,” said Yannis Tsitos, President.  “We are very excited at the prospect of Goldsource becoming a low cost producing gold company in 2015.”



Preliminary Economic Assessment (Effective date June 15, 2014)



The Company cautions that the PEA is preliminary in nature in that it is based largely on Inferred Mineral Resources which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be characterized as mineral reserves, and there is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Management’s production decision for the project is not based on a feasibility study of mineral reserves demonstrating economic and technical viability. This project has a much higher risk of economic or technical failure and may adversely impact the Company’s future profitability.



In September 2014, Goldsource filed a  PEA technical report titled “Preliminary Economic Assessment of the Eagle Mountain Saprolite Gold Project, Guyana, for the near-surface oxide resources (“saprolite”) at its Eagle Mountain Gold Project, approximately 230 kilometres southwest of the Georgetown, Guyana. Conceptually, the PEA results suggest that the project has low capital and operating costs, minimized technical risk and a short development timeline. The summary results of the PEA were previously announced in the Company’s news release dated July 31, 2014 and there are no material differences in the Mineral Resources or PEA results between the technical report and the news release. The PEA report, dated September 12, 2014 with the effective date June 15, 2014, was prepared in complaint with National Instrument 43-101 on behalf of Goldsource by A.C.A. Howe International Limited (“ACA Howe”) of Toronto, Canada. The report can be found on this website and under the Company’s profile on SEDAR at




July 2014 Updated Eagle Mountain Resource Estimate
(Cut-off of 0.5 g/t Au)
Category Material Tonnes Au Grade (g/tonne) Contained Ounces Au Used in PEA
Indicated Saprolite 1,590,000 1.45 74,000 Yes
  Fresh Rock 2,331,000 1.52 114,000 No
Inferred* Saprolite 7,203,000 1.32 306,000 Yes
  Fresh Rock 13,433,000 1.13 486,000 No
Eagle Mountain (2012) and Goldsource (2014) Mineral Resource (0.5 g/t cut-off)
Technical Report Mineral Resource Update, dated November 21, 2012, by ACA Howe; and PEA, June 15, 2014 by ACA Howe.



*Inferred Resources have been estimated from geological evidence and limited sampling and must be treated with a lower level of confidence than Indicated Resources.



Preliminary Economic Assessment Highlights


  • The PEA incorporates a gold price of $1,250 /oz Au. Estimate includes:
  • Pre-tax Internal Rate of Return (“IRR”) of 84% and after-tax IRR of 63%.
  • Cash operating costs, exclusive of sustaining capital, for saprolite mine life averages $480 per ounce gold including a 15% contingency.
  • Total capital costs including all proposed expansions (Phase II, III & IV expansions) and sustaining capital are estimated at $24.2 million.
  • Phase I, pre-production capital costs of $5.9 million including a 15% contingency.
  • Conceptually, the first four years of gold production would be 5,600, 14,400, 21,600 and 28,800 ounces gold, respectively.
  • Life of mine production of estimated 168,700 ounces gold from gravity-only processing at estimated 60% recovery.
  • Inventory of 161,900 oz Au in settlement ponds from gravity-only processing rejects for potential future reprocessing using standard technologies.
  • Not considered in the PEA are the in-situ “fresh-rock” resources of Indicated 2,331,000 tonnes @ 1.52 g/tonne Au containing 114,000 oz and Inferred 13,433,000 tonnes @ 1.13 g/tonne, containing 486,000 oz (both at 0.5 g/t Au cut-off).   

    The Eagle Mountain mining and processing schedules are based on a phased-approach model with four phases proposed over four years. Phase I mining rates would be 1,000 tonnes per day (one 12-hour shift, 7-days per week) in year one ramping up to approximately 3,000 to 4,000 tonnes per day by year four. Conventional open cut mining of soft weathered rock (gold mineralized saprolite) is proposed using a team of excavators, bulldozers and wheel-loaders to excavate and separate materials within the open cut with downhill gravity transport by slurry to the processing facility. The stripping ratio is low and estimated at an average of 0.9:1 (waste:ore) over mine life. No blasting or truck hauling is required for mineralized saprolite.



    Eagle Mountain Fully Permitted for Mining Activities




    In August 2014, a Medium Scale Mining Permit was granted to Kilroy Mining Inc. for operations on a 250 hectare portion of Goldsource’s Eagle Mountain gold deposit, located within the approximate 5,050 hectare Eagle Mountain prospecting license. The Permit grants permission to mine gold, diamonds, precious metals and precious minerals within the Permit area. The Eagle Mountain prospecting license is held by Goldsource’s 100%-owned subsidiary in Guyana, Stronghold Guyana Inc. (“Stronghold”). As a medium scale mining permit is required under Guyana law to be held by a Guyanese national, Stronghold has entered into agreements with Kilroy, a private arm’s length Guyanese company pursuant to which Stronghold and Kilroy will jointly operate the Property. Kilroy is the holder of the Permit and has granted to Stronghold exclusive rights to conduct mining operations on the Property including any additional areas acquired by Kilroy. Stronghold will fund all expenditures on the Property and receive 100% of all revenues, subject to applicable government royalties and a 2% net smelter return royalty to Kilroy as compensation for its participation.




    With the current resource covering only a small portion of Eagle Mountain – 250 hectares inside the 5,050 hectare property – there is excellent potential for expansion.  The deposit remains open in three lateral directions and at depth, showing strong mineralization along its edges.









    Location and Infrastructure



    The Eagle Mountain gold project is located approximately 200 km southwest of Guyana’s capital, Georgetown, and 45 km from the historic Omai Gold Mine, which profitably produced an estimated four million ounces of gold at an average grade of approximately 1.4 g/t, from 1993 to 2005. Historical production from the general Madhia area is estimated at over one million ounces of gold from alluvial and eluvial sources. A number of successful gold mining operations are currently underway in Guyana.

    Goldsource  has excellent access and infrastructure. There is an existing road to the property and a major road to Georgetown is just 5 km away. A small airport at Madhia Township is within 7 km of Eagle Mountain and waterways are 30 km from the property.



    Goldsource is leveraging its enviable location in Guyana in targeting project development during the coming six months, followed by Phase 1 gold production in H2 2015.







    Strategic Business Combination Unearths Eagle Mountain’s Potential.



    In February 2014, Goldsource completed a business combination agreement with Eagle Mountain Gold Corp. (TSX-V:Z), now a wholly owned subsidiary of Goldsource.



    The strategic amalgamation has created a low-cost, quick to free cash flow consolidation vehicle with significant internally financeable growth, built upon a high-quality gold project with well-defined resources in mining-friendly Guyana. The new Goldsource boasts a leadership team with extensive management experience in low-cost execution and staged development in the Americas.




Key GXS Shareholders
Management & Board of Directors 16%
Donald Smith Value Fund (NY, USA) 16%
Omai Gold Mines Ltd., a 95% owned subsidiary of IAMGOLD Corporation 5%



Eagle Mountain Project: Five-Year Strategy



  • Management has a well-defined strategy to scale gold production Eagle Mountain:
  • Become a low cost gold producer in the Guyana Belt with significant free cash flow
  • Use cash flow to expand production capacity from 1,000 to 4,000 tpd
  • Assess potential to treat gravity tailings inventory to increase recovery and production
  • Acquire similar projects within the Guyana Belt to apply the same development model
  • Support increased local employment and community benefits.
  • Transition from medium scale to large scale mining license.  

Share Structure




Issued & Outstanding Shares:     126,973,249
  Strike price Expiry  
Warrants $0.20 – $0.36 September 10, 2017 – December 30, 2017 41,537,611
Options $0.14 – $0.24 September 30, 2016 – December 16, 2020 9,164,735
Fully Diluted     177,675,595

As of December 22, 2015




Directors & Management


J. Scott Drever, CEO and Director

Scott Drever has 45 years of geological expertise. He has dealt extensively with strategic planning, mergers & acquisitions, and operations for international mining corporations. Mr. Drever has served as an Executive Officer and Director of a number of public companies listed on the TSX and the TSX Venture Exchange, including Placer Dome Ltd., Blackdome Mining Corp., and Silvercrest Mines Inc.



 Ioannis (Yannis) Tsitos, President and Director

Mr. Tsitos has over 26 years experience in the mining industry, having spent 19 years with BHP Billiton group. In his time in the industry, he has lived and worked in South Africa, Ecuador, Greece and United Kingdom, and has been working in Canada since 2000. Originally a physicist-geophysicist, he left BHP Billiton in December 2007, where he had the title of New Business Manager for Minerals Exploration with a global reach, but based in Vancouver. He has been instrumental in the identification, negotiation and execution of more than 50 exploration agreements with juniors, majors, as well as with state exploration and mining companies. Mr. Tsitos has also been part of two discovery teams with BHP Billiton in porphyry-copper and nickel-sulphide deposits. He holds a B.Sc degree in Physics from the University of Athens and a master’s degree in Applied Geophysics and Geology from the University of Birmingham, UK. In addition, he completed management and finance studies as part of an MBA program with Herriot Watt University, Edinburgh.


 Eric Fier, COO

Eric Fier has over 25 years of international experience in a senior capacity including exploration, acquisition, development and production of numerous mining projects in Chile, Brazil, Honduras, Mexico and Peru. His background includes project evaluation and management, reserve estimation and economic analysis, as well as operations management. Mr. Fier previously served as Chief Geologist with Pegasus Gold Corp., Senior Engineer and Manager with Newmont Mining Corp., and Project Manager with Eldorado Gold Corp.




 Nicholas Campbell, CFO

Mr. Campbell brings to Goldsource over 12 years of finance and corporate valuation experience in the mining industry. This includes 10 years working in capital markets as a Mining Research Analyst. Prior to joining Goldsource, Mr. Campbell was a Financial Advisor to SilverCrest Mines Inc., which was recently acquired by another precious metal producer. He also was Head of Planning and Business Development for Torenco Energy, a private oil and gas company focused on Mexico. With strengths in the due diligence process, financial modelling and analysis, marketing and corporate development, he brings a unique set of skills to the Company.




 Jonathan Dubois-Phillips, Independent Director

Jonathan Dubois-Phillips is a finance professional with a successful career spanning Asia, North America, and Europe. In his most recent role, Mr. Philips was Managing Director Finance, for Ivanhoe Capital Corporation.


Based in Vancouver and with responsibilities in Hong Kong, he worked on finance matters for the founder’s publicly traded and privately held companies. He is a former investment banker who spent more than eight years with Lehman Brothers in the Principal Transactions/Global Real Estate Group.While at Lehman, Jonathan was involved in over US$10 billion of real estate debt and equity transactions, investing the firm’s balance sheet. Post-Lehman, Jonathan moved to Nomura International, Japan’s largest investment bank, when Nomura acquired Lehman’s key Asian personnel. At Nomura, Jonathan was a Managing Director in the Asset Finance group based in Hong Kong. Jonathan has a Masters of Business Administration from INSEAD, and a Bachelor of Commerce from the University of British Columbia in Urban Land Economics




Steven B. Simpson, Independent Director

Mr. Simpson has been an Australian certified practicing accountant (CPA) since 1977. He is also a Chartered Secretary and member of the Institute of Directors. He is a Commerce graduate from the University of New South Wales and is a former partner of Price Waterhouse (now PriceWaterhouseCoopers LLP) in both the Australian and Asian markets.

Mr. Simpson sits on the board of publicly listed companies and is a member of audit committees in Singapore for such companies. Mr. Simpson is a principal of Triton Advisory Group, a mergers and acquisitions, fixed income trading, asset management and corporate advisory group located in Singapore.



 Graham C. Thody, Chairman and Independent Director

Mr. Thody is a member of the British Columbia Institute of Chartered Accountants (“BCICA”) as well as the Canadian Institute of Chartered Accountants.  He served as a member of the BCICA By-Laws Committee for several years.  Mr. Thody has also served as a Director and Executive Member of the Lions Gate Hospital Foundation, as well as the Chair of their Finance Committee.  He holds a bachelor of Commerce degree (Marketing) from the University of British Columbia.  He was a Partner of Nemeth Thody Anderson, Chartered Accountants of Vancouver BC from 1979 to 2007.  His practice focused on audits of reporting companies, participation in the Initial Public Offering Process, corporate mergers and acquisitions as well as domestic and international tax matters.  He is currently a director of several reporting corporations which are involved in mining exploration and development throughout North, Central and South America.



 Bernard Poznanski, BSc., LLM, Corporate Secretary

Mr. Poznanski is one of the founding partners of Koffman Kalef, a law firm specialized in business law, and is currently the head of that firm’s securities group. Mr. Poznanski acts for a wide variety of companies listed on the TSX, the TSX Venture Exchange, the American Stock Exchange and NASDAQ. He has particular expertise in dealing with mining and technology companies and handling companies with international projects. Mr. Poznanski also acts as a director or officer of various publicly-listed companies. Mr. Poznanski holds the following degrees: Bsc. (University of Guelph); LLB (University of Ottawa); and LLM (McGill University).






Corporate Head Office


Goldsource Mines Inc.
570 Granville Street, Suite 501
Vancouver, BC V6C 3P1


Tel: (604) 694-1760
Toll Free: 866-691-1760
Fax: (604) 694-1761


Investor Relations


Fred Cooper, Investor Relations
Telephone: 604-694-1760 ext 108


Posted August 12, 2017

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