The South Dakota Board of Minerals and Environment has granted a state permit to Dakota Mining (AMEX) for development of the Anchor Hill gold project. The deposit is close to the company’s Gilt Edge mine, near Deadwood.
Anchor Hill contains minable reserves of 8.64 million tons grading 0.028 oz. per ton (or 243,000 containing oz. gold). The oxide deposit is expected to produce about 50,000 oz. per year for the first three years. Cash costs over the life of the known reserves are projected at US$250 per oz.
The company will release US$4 million from escrow to finance construction.
To accelerate gold production, Dakota will use the existing Gilt Edge leach pad during initial development. “We will load the 900,000-ton pad with run-of-mine and crushed ore before spending any money,” Dakota President Alan Bell says. “It takes away the recovery risk.”
The US$4 million, plus incremental cash flow from Anchor Hill, will be used to construct leach-pad extensions.
Total capital costs are estimated at US$6.8 million.
The company plans to carry out stepout and infill drilling at Gilt Edge in 1996.
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