Forget the precious metals market, a local company is hoping to cash in on rubies and sapphires in Greenland.
On Wednesday, Vancouver-based True North Gems Inc. (TSX-V:TGX) reported a favourable pre-feasibility study for its Aappaluttoq ruby and pink sapphire project in the Arctic country.
The study envisions a nine-year open pit mine with a total probable reserve of 161,600 tonnes of ore grading 350 grams per tonne of clean gemstone-producing corundum.
The project is expected to cost upward of $41.8 million to build.
“Today’s release demonstrates that the Aappaluttoq ruby project is economic with modest capital requirements in a secure and welcoming jurisdiction,” said True North president and CEO Nicholas Houghton.
Earlier this month, the company released an updated mineral resource estimate that showed the project contained as much as 296 million carats of gemstones.
In 2008, True North priced a 5,224-carat parcel of Greenland rubies and sapphires at US$123,266, or US$23.60 per carat.
At the time, the company said market price values ranged between US$15 per carat for lower quality gems to US$300 per carat for higher quality materials.
Houghton said Wednesday those valuations are likely to be lower than what the company could obtain in today’s market.
“We have an opportunity to open a new chapter in the coloured gemstone and jewelry world,” Houghton said.
True North has said it will issue a final 43-101 compliant resource estimate for the project within 45 days, and simultaneously apply for a mining licence.
The company had $1.2 million in cash as of December 31.
At press time, True North’s shares were unchanged at $0.11.
Joel McKay
Twitter: jmckaybiv