Southern Africa-focused Galane Gold is advancing plans to reopen the Galaxy gold mine near Barberton, in Mpumalanga, with the company saying on Thursday that first production at the property is planned for March next year.

The TSX-V-listed miner, which operates the Mupane mine in Botswana, said that it had secured a $5-million loan from Barak Fund, which it intended to use for the refurbishment and expansion of the Galaxy processing facilities, as well as restarting underground mining at Galaxy, which is one of the oldest gold mining operations in South Africa.

Drawdown on the facility is subject to certain conditions, which the company said it hoped to complete by next month.

Assuming the drawdown under the Barak facility, production could start by the end of the first quarter of 2019. The first phase of the restart of the Galaxy property would entail increasing the capacity of the processing plant to 30 000 t/m and targeting 25 000 oz/y of production at a cash cost of less than $800/oz.

During the implementation of the first phase, Galane would complete a study on a second expansion phase, with the aim of increasing capacity at the Galaxy processing plant to 60 000 t/m and lowering the cash cost with increased economies of scale, the miner said in its management discussion and analysis for the three months ended June 30.

Meanwhile, Galane said that it had produced 10 088 oz of gold in the second quarter, compared with 7 649 oz in the previous quarter and 6 709 oz in the prior-year quarter.  Its all-in operating cost was $905/oz.

The miner achieved positive cash flows from operating activities of $2.6-million and generated $13.2-million in revenue from the sale of gold and incidental silver. Net earnings amounted to $2.4-million for the three-month period.

“It was a very impressive quarter for Galane with record ounces, strong positive cash flows and a very low all-in sustaining cost,” commented Galane Gold CEO Nick Brodie. The company’s focus would now shift to preparing for the start of the Galaxy project, he added.