Columbus holds 44.99% of the advanced Montagne d'Or gold project (Nordgold 55.01%) and, following "multiple inquiries" 12 months ago, had moved to reassure investors there were was no ban on the use of cyanide for gold mining by the European Union, which includes the territory in South America.
Yesterday, it said the French government had authorised the start-up of a cyanide plant at the Dieu-Merci gold mine about 100km west of Cayenne, with processing slated to begin in early 2020.
Dieu-Merci is owned by the Auplata Mining Group, which was one of Columbus' major shareholders until May 2016.
Columbus Gold said the new plant was expected to have a capacity of 300t per day.
"This recent development is a major step and a clear message that the French government is committed to developing the gold mining industry in French Guiana," Columbus president and CEO Rock Lefrançois said.
Montagne d'Or is in the permitting process.
A 2017 bankable feasibility study envisaged initial capex of US$361 million for a 12-year mine producing an average annual 214,000 ounces, at an all-in sustaining cost of $779/oz and with an after-tax NPV (5% discount) of $370 million and IRR of 18.7%.
Shares in Columbus Gold have fallen from a February high of C27c to an October low of 11c.
They gained 0.5c yesterday or 3.4% to close at 15c, capitalising it at $25.7 million (US$19.3 million).
Its major shareholders are US Investment Funds, Iamgold, Nordgold and Sandstorm, according to a November presentation.
Columbus is chaired by Allegiant Gold chairman Robert Giustra.
