The Canadian subsidiary of Mineral Resource Development Inc. (MRDI), a division of H.A. Simons, calculated a measured, indicated and inferred resource of 686,000 oz. gold contained in 2.8 million tons averaging 0.24 oz. gold per ton. The diluted proven, probable and possible resource weighs in at 1.2 million tons averaging 0.301 oz., or 362,000 contained ounces.
Calculations were based on a cutoff grade of 0.15 oz. gold. The study suggests a mine life of 6.5 years and annual gold production of about 52,000 oz. Average cash costs are estimated at US$192 per oz., whereas capital costs over the life of the mine are pegged at US$19.7 million.
The study envisages a 600-ton-per-day (210,000-ton-per-year) underground mine, accessible via a ramp, with ore to be custom-milled off-site. The mining method recommended is sub-level open-stoping, with development waste to be used as backfill. Mining would be contracted out, as would hauling and processing. Operating costs per ton of ore are estimated at US$50.81, and gold recovery is pegged at 87%.
In related news, Treminco has negotiated a private placement of 1 million units priced at 35 cents each, which translates into gross proceeds of $350,000. Each unit consists of one share of Treminco and one share purchase warrant. Each purchase warrant is exercisable for one share at 40 cents each for a year. Company insiders are expected to buy a portion of the private placement. The proceeds will be used to complete the acquisition of the Elkhorn gold project in Montana.
To obtain a full interest in Elkhorn, Treminco must issue 550,000 shares and pay US$1.1 million to two subsidiaries of
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