Sandstorm Gold Ltd. announced July 6 that the Bachelor Lake Mine, operated by Metanor Resources Inc., had received an environmental certificate of approval for commercial production.

Although they are approved to commence the mining operation located near Val d’Or, the company will still have to respect certain conditions, such as water management rules. It will also be required to establish an advisory committee that includes members of the Cree First Nation of Waswanipi along with representatives from the surrounding Jamesien communities.

The approval allows Metanor to begin production at the Bachelor Lake Mining facility around 2013. The initial estimates expect a three-and-a-half-year life span with peak production at around 60,000 ounces of gold per year.

But that was before July 12, when Metanor and Sandstorm released the results from the initial 5000-ton sample they extracted. Along with validating the quality and consistency of the ore, they also determined that gold recovery rate was a lot higher than expected, leading to 25 percent more gold being extracted over the lifetime.

Sandstorm signed a gold stream agreement with Metanor for 20 percent of the gold the mine produced at a rate of $500 per ounce, giving Sandstorm a $20 million cut by 2017.