Echo BAy to triple Cove’s gold output

A 14-year mine plan which will see gold output triple at the McCoy/ Cove property of Echo Bay Mines (TSE) in Nevada has been completed by Pincock, Allen & Holt Inc., consulting geologists and engineers. The mining plan calls for an enlarged open-pit operation which could eventually reach a depth of 1,500 ft, thereby enabling exploitation of deep sulphide zones at the Cove mine.

The over-all life-of-mine strip ratio for the McCoy/Cove property will be 7.1:1, according to the recently completed mining plan.

Initially it was estimated to be about 3:1, and following operations in the second quarter, the ratio increased to 5.6:1.

The open-pit walls will have 40 -45 slopes above the water table, and 35 -40 slopes below, the study says.

The company expects its McCoy/ Cove production will climb to 225,000 oz gold and 2.7 million oz silver in 1989. Production of more than 330,000 oz gold and 6.5 million oz silver is forecast for the property in 1990.

This year’s production at McCoy/ Cove will be about 100,000 oz gold and 700,000 oz silver, according to Echo Bay.

The Cove deposit is located one mile from the McCoy mine and was Echo Bay’s most important discovery in 1987. It continues to represent a major source of untapped reserves for the company. Reserves calculated

Total proven and probable reserves at McCoy/Cove are now estimated at 56.4 million tons grading 0.059 oz gold per ton and 2.5 oz silver per ton. This is an increase of 28% in gold content and 46% in silver content compared with year- end 1987 reserves.

“Mining the Cove deposit is a huge undertaking which has taken several months to finalize,” said Catherine Gignac, a research analyst at Merrill Lynch Canada. “The economics look good,” she said.

“There are still many unknowns in a project this big and complex,” said Echo Bay president John Zigarlick. “With a 14-year mining plan already in hand, we have sufficient time to develop the deep sulphide ore at Cove. We are driving ramps into the Cove and McCoy orebodies in 1989, and these will tell us a great deal more about both.”

In addition to the open pit, the mining plan calls for the development of an underground ramp into the high-grade sulphide zones. This will permit exploration drifting and further definition drilling of the zones.

The original concept for mining the Cove deposit at a 10,000-ton- per-day rate was to utilize a small open pit and a large underground mine.

The production rate has now been expanded to 17,500 tons per day, and a larger open pit will supply additional throughput. Mill capacity enlarged

The mill capacity has been increased to 7,500 tons from 5,000 tons per day, and heap-leaching facilities have been enlarged to 10,000 tons from 5,000 tons per day.

The capital cost of the expanded operation is forecast at $220 million, compared with an earlier forecast of $155 million. Financing for virtually all of the expansion program has been arranged and the company reports credit facilities in place totaling $210 million.

Echo Bay’s shares were traded recently on TSE at a low of $17.12, down significantly from the 52- week high of $33.25.