NEVADA — X-Cal attempts to rouse Sleeper gold mine — Junior signs option agreement with Amax Gold

Vancouver-based junior X-Cal Resources (XCL-T) plans to restart mining operations at the Sleeper gold project, a past producer situated in the Slumbering Hills, some 30 miles north of Winnemucca.

In April, X-Cal entered into an option agreement with Amax Gold (AXG-T), allowing the former to acquire the latter’s interest in the Sleeper open-pit mine for US$16 million, 1.5 million X-Cal shares and a 1% net smelter return royalty.

Amax, in turn, is allocating US$10 million toward reclamation costs and will retain the environmental liabilities for activities undertaken prior to the sale.

Should the deal go through, X-Cal’s total land package in the area will reach 12,000 acres. The company’s assets at the site will include: the dormant Sleeper gold mine, where mining began in 1986, only to be halted 10 years later; several exploration targets; a 2,500-Ton-per-day mill; a 19,000-Ton-per-day crusher; and a heap-leach circuit which is currently producing about 1,000 oz. gold per month from the residual leaching of existing pads.

Until X-Cal obtains its operating permits, the two companies will split the gold production equally, giving X-Cal immediate cash flow.

The Sleeper gold deposit was formed by a series of epithermal events at the intersection of a range-front fault and a normal fault. The deposit is now covered by up to 150 ft. of alluvium.

Four types of gold mineralization are hosted within a brittle rhyolite: high-grade veins; medium-grade breccias; low-grade stockworks; and alluvial gravels.

The deposit is characterized by high gold-To-silver ratios.

Extensive minor faulting following gold mineralization has crushed much of the breccia and stockwork structures, resulting in oxidation to depths of 600 ft. The unoxidized mineralization in the non-fractured zones is refractory.

Preliminary resource estimates for the Facilities area (also known as the Silica Cap target), West Wood zone and the newly discovered Ready Line area stand at 104 million tons grading 0.013 oz. gold per ton, 386,000 tons of 0.680 oz. gold, and 1.6 million tons of 0.035 oz. gold, respectively.

X-Cal has already begun an exploration program, budgeted at US$3 million. The company is infill drilling between the Wood Pit and Ready Line, on the saddle between the Wood and main Sleeper pits, east of the mill and west of the pit at Bedrock Casino.

X-Cal intends to revamp the heap-leach facility to process lower-grade bulk mineralization. It also plans to re-establish milling operations to process high-grade veins.

The company is studying the possibility of reprocessing material on the existing heap-leach pads and recovering gold from tailings and waste dumps.