Franco, Euro advance Ken Snyder to production

Faced with the real possibility of declining royalty payments from future operations along this state’s Carlin trend, Franco-Nevada Mining (FN-T) and Euro-Nevada Mining (EN-T) have decided to enter the ranks of precious metals producers.

Already, the companies are busy developing the Ken Snyder, in the northern portion of the trend.

“We want to develop the Ken Snyder mine ourselves because there is just too much to give away,” says Seymour Schulich, chairman of both companies.

The high-grade deposit is estimated to contain 2.1 million oz. gold and 23 million oz. silver. The grade is 1.4 oz. gold-equivalent per ton within 1.8 million tons.

The mine is named after its founder, who began assembling a land position for Franco and Euro in 1992. The 26,000-acre property, known as the Midas project, is shared equally by both comanies. Situated nearby is the Midas claim block, held by Romarco Minerals (R-T).

The Midas district, first discovered in 1907, is characterized by high-grade gold-silver veins hosted in altered tuffaceous volcanic rocks. The district lies in a domal antiform which exposes Miocene-aged volcanics. The northwest-trending antiform is coincident with the Carlin trend, to the south.

Most of the mineralization at Ken Snyder is in the Colorado Grande vein system, which stretches north-south across the property for more than 22,000 ft. Subsidiary vein structures, including the Gold Crown vein, trend to the northwest.

The mineralization occurs as narrow banded brecciated epithermal veins. The dominant minerals of interest, other than gold, are electrum, naumannite (a silver selenide) and fischesserite (a gold-silver selenide).

Andre Douchane, vice-president of operations, said the grade of 1.4 oz. per ton takes into account the possible dilution that may result from mining widths as narrow as 3 ft.

“We plan on mining at even narrower widths, too,” he added.

In April, operators began constructing a decline, which slopes northward toward the main deposit. The decline has already encountered the Sleeping Beauty zone, which is the southern extension of the Colorado Grande vein. A channel sample from the 14-ft. face averaged 0.98 oz. gold per ton.

The main deposit is, in places, close to the surface and extends to a depth of at least 1,500 ft.

The decline will be deepened until the main deposit is reached, possibly by the end of the year. A combination of long-hole and cut-and-fill mining methods will then be employed, and the first gold is expected to be poured in the next 18 to 24 months.

The 500-ton-per-day mill is expected to produce 270,000 oz. gold-equivalent annually, using the standard Merrill-Crowe process. Production costs are pegged at only US$78 per oz. gold-equivalent, which would make Ken Snyder the lowest-cost mine in North America.

Gold recovery is projected at 97%; silver recovery, at 95%. The operation is expected to extract 1.5 lb. of precious metal per ton.

Development costs will likely total US$84 million, whereas total capital costs are projected at US$100 million.

The operation, which will disturb only 75 acres, is on private land, so a formal environmental impact statement was not required. Permits have also been received for a 3-million ton tailings pond.

Franco and Euro say that, with a minimum expenditure of US$10 million, daily production can be expanded to 1,000 tons

The mine’s founder, Ken Snyder, described the exploration potential as excellent. “We could be drilling here for years to come.”

To date, more than 500,000 ft. of reverse-circulation and core drilling have been drilled in about 560 holes. The core samples are fire-assayed, and any intervals measuring greater than 0.1 oz. per ton are re-assayed.