Stan West funded for 500 ton mill Arizona gold mine (line head)

Culminating six years of exploration and development work, Stan West Mining Corp. has now raised $12.1 million(US) in new financing to bring its McCabe gold-silver mine in Arizona into production.

At the planned 500-ton rate, this mine will turn out 50,000 oz gold and 140,000 oz silver annually. With operating costs estimated at $206 per ton and a gold price of $400, the company is expected to show a pre- tax cash flow of $11.9 million annually.

The financing and production decision reflects much credit on its president, Canadian geologist Stanley W. Holmes, who simply refused to give up, even after his joint venture project partner Santa Fe Southern Pacific Corp. terminated its interest. And prior to that, the mine was optioned and then dropped by Union Carbide.

Measured reserves currently stand at 753,700 tons grading 0.357 oz gold, with an ultimate estimated reserve of 3,000,000 tons averaging 0.379 oz.

Tenders are being called for a 500-ton gravity-cyanide- C.I.P. mill, as well as for the tailings dam and ancillary structures relating to the surface plant.

Also, bids are out for an extensive underground development program which includes headframe and hoist modification, shaft deepening from 1,550 ft to 1,700 ft, ore and waste passes, 10,000 ft of lateral development and 4,200 ft of raising for stope development.

This work is expected to get under way in August, with actual production to commence by the third quarter of 1988.

Quite apart from this U.S. program, Stan West is the operator of a 3-way $3-million joint venture underground exploration program to begin shortly at what is known as the DeSantis project in Ogden Twp., five miles south of Timmins, Ont. The other partners are Noranda Exploration Co. and Canacord Resources Inc.

That program will concentrate on expanding ore reserves both within the old mine workings and below the bottom or 1,175-ft level. Present reserves are calculated at 297,564 tons grading 0.20 oz gold per ton, with an additional 503,259 tons geologically inferred.

Stan West’s shares are listed both on the tse and on the American nasdaq system. This most recent financing consisted of a private placement of 3,000,000 units (consisting of one share and 1/2 warrant) with European institutional investors by Shearson Lehman Brothers International and McLeod Young Weir International.