As exploration continues, we are confident these three zones will ultimately host more than one million ounces of gold. We will capitalize on our exploration success by taking steps next year to develop these discoveries into the Company’s next mine which we’ll be calling Grey Fox.The Black Fox Mill and Stock Mine Property Thanks to the Black Fox mill enhancement, processing capacity increased by 10 percent to 2,200 tonnes per day. To accommodate future production from Grey Fox in 2015, the Company will require additional mill capacity. We have recently undertaken a study to evaluate the potential of adding a SAG mill which would expand ore processing capacity to 3,500-4000 tonnes per day. The property hosting the Company’s mill is located approximately 30 kilometres from the Black Fox mine and is home to the previously producing Stock Mine. As recently as 2003, the Stock Mine produced between 400 and 500 tonnes of ore per day. We are currently reviewing historical data, production records and geological information to determine the economic merits of refurbishing and reopening the Stock Mine. We will be releasing our preliminary findings during the first half of 2013. Goldfields Our Goldfields property in Saskatchewan remains a core asset for Brigus. This property hosts over one million ounces of gold reserves and has an estimated mine life of 13 years. The project has a proposed annual gold production of 100,000 ounces over the first seven years. The mine is permitted and will require a two-year construction period once a production decision is made. The pre-feasibility study indicated a net present value of approximately $144 million using a five percent discount rate; it provides an internal rate of return of 19.6 percent, assuming a gold price of $1,250 per ounce. At gold prices of $1,500 per ounce, Goldfields returns a net present value of over $300 million.
While Goldfields remains a key and valuable development asset for the Company, Brigus will first focus on the development of Grey Fox due to its proximity to the Black Fox mine infrastructure and its potential to significantly increase the Company’s reserves.Brigus’ Strengthening Financial Position In October, the Company secured $30 million in debt financing. We used $24.4 million of the proceeds to repurchase four percent of the gold stream, thereby reducing the gold stream to eight percent where it will remain. By repurchasing the gold stream, the Company is capitalizing on an immediate and advantageous increase in cash flow. In 2013, Brigus will fund Black Fox and Grey Fox operations with cash flows generated internally. Mining operations will continue to be profitable as gold production increases and reaches steady state levels. Cash costs are anticipated to stabilize in the range of $700 - $750 per ounce. While 2012 has been a challenging year for gold equities, we are optimistic 2013 will be more positive for the sector. For Brigus, we believe strengthening gold prices paired with increasing production at Black Fox will enhance shareholder value. Recently Canaccord Genuity and Paradigm Capital initiated market coverage on Brigus. Both analysts published positive reports and Brigus is now actively covered by seven analysts. The Team I’m delighted that Daniel Racine has accepted the position of President and Chief Operating Officer of Brigus. Daniel has an excellent reputation in the industry and has demonstrated strong leadership and operational abilities as our Chief Operating Officer. I am confident he will excel in his new role. I look forward to working with Daniel and the rest of the executive team as we drive to add value through increased production, targeted exploration, growing cash flows and profitability. I’m very proud of our team at Brigus for continuing to make safety a top priority. To date the team has worked over 2.4 million hours without a lost time injury. I would also like to acknowledge their dedication, hard work and commitment to the Company.
And to you, our shareholders, thank you for your continued support during the year. On behalf of the team at Brigus Gold, I would like to wish you and your families a safe and enjoyable holiday season and the very best for 2013.Sincerely, Wade K. Dawe Chairman and CEO Cautionary and Forward-Looking Statements Statements contained in this news release, which are not historical facts, are forward-looking statements that involve risk, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. All statements regarding the ability of the Company to achieve its production, total cash costs, steady state annual production and mining rate estimates; estimated average gold grades for the open pit and underground operations; increase in gold production; increase in profitability; exploration drill results and resource additions, are forward-looking statements and estimates that involve various risks and uncertainties. This forward-looking statements include, or may be based upon, estimates, forecasts, and statements as to management's expectations with respect to, among other things, the outcome of legal proceedings, the issue of permits, the size and quality of the Company's mineral resources, progress in development of mineral properties, future production and sales volumes, capital and mine production costs, demand and market outlook for metals, future metal prices and treatment and refining charges, and the financial results of the Company. Important factors that could cause actual results to differ materially from these forward-looking statements include environmental risks and other factors disclosed under the heading “Risk Factors” in Brigus’ most recent Annual Information Form and Management Discussion and Analysis filed under the Company’s name at www.sedar.com and annual report on Form 40-F filed with the United States Securities and Exchange Commission at www.sec.gov as well as elsewhere in Brigus’ documents filed from time to time with the Toronto Stock Exchange, the NYSE Amex Equities, the United States Securities and Exchange Commission and other regulatory authorities. All forward-looking statements included in this news release are based on information available to the Company on the date hereof. The Company assumes no obligation to update any forward-looking statements, except as required by applicable securities laws.