The project began producing gold concentrate last February, but to declare commercial status, the mine had to achieve certain critera laid out by management, including sustainable production approaching mill throughput of 200 tonnes per day. It also had to have gold recovery rates of 90 percent and an output rate of 77,000 ounces of gold equivalent per day.
Banks Island said that its board decided to declare commercial production even though all the criteria above, such as the recovery rate and average production, were not met. Overall gold recovery was 85 percent in 2014, excluding some gold that will be reprocessed, while average production was impacted by higher than expected dilution.
Its decision to declare commercial status was taken based on the fact that it produced a saleable product for 277 days in 2014, the company said.
The Canadian gold miner is one of the only operators in the world that is successfully using a dense media separation plant to pre-concentrate a primary gold ore. Pre-concentration rejects up to 50 percent of the mined mass in a coarse gravel-sized product, leaving enough void space in underground workings to dispose of all tailings.
Banks Island is planning to expand gold production at the mine, with the 16,000 hectare property containing several advanced prospects that remain unexplored.
In order to bolster production, it said it expects further financing will be necessary.
The miner endured a challenging 2014 that included higher capital costs, unexpected mining dilution and working capital shortages, impacted by an extended comissioning period for the process plant.
With more funds, the company is planning to increase its inventory of parts and supplies and purchase a second fleet of smaller, underground mobile equipment to increase production.
Banks Island is anticipating a productive year for mine development in 2015, it added.
Shares were last down 2.9 percent at 16.5 cents in Toronto on Friday, earlier rising to as high as 19 cents. The stock has declined over 72 percent in the last 12 months.