Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.
Lower gold prices are impacting Osisko Mining Corp.’s plans for its Hammond Reef Gold Project near Atikokan.
In its second quarter report released Thursday, the company said that the Hammond Reef project requires higher gold prices to justify the investment on construction of a new mine there.
In addition, the company determined following a review of the project, that an impairment charge — a reduction on a company’s balance sheet that adjusts the value of a company’s goodwill — of $487.8 million was necessary. Accordingly, the project’s value recorded on the company’s books was reduced to nil, the report said.
Osisko acquired the Hammond Reef gold project, about 25 kilometres north of Atikokan in 2010, through the acquisition of publicly-traded Brett Resources Inc. for $375 million.
Hammond Reef is a large and growing development project with potential to become a substantial open-pit mine.
During the second quarter of 2013, Osisko invested $2.2 million, including working capital, on the property and focused efforts on the preparation of the feasibility study and the publication of the environmental assessment report.