Echo Bay plans new gold mine in Washington state

Echo Bay Mines (TSE) has announced plans to bring into production by early 1990 its Kettle River property in northeastern Washington state. Based on exploration to date and a mining plan developed by Kilborn Engineering and Echo Bay, proven and probable reserves are 3.9 million tons grading 0.189 oz gold per ton.

Mine life is projected at seven years, although exploration is expected to enlarge that reserve, according to the company. The orebodies on the property have yet to be fully delineated.

“We think our chances of extending reserves are excellent, and we think the odds of finding more gold in this district are equally as good,” President John Zigarlick said in a press release. Echo Bay holds a 70% interest in the project and will be operator. Crown Resources of Denver, Colo., owns 15% and Gold Texas Resources (VSE) owns the remaining 15%.

The initial mining plan envisages two underground mines, one at Overlook, 20 miles to the south of Kettle River, and Kettle River itself. A carbon-in-leach mill will be built at Overlook to process up to 1,500 tons of ore per day. Mill recovery rates should average 90%.

Annual production at Kettle River should reach 110,000 oz of gold during the first two years of operation. Estimated cash costs will be approximately $175(US) per oz. In subsequent years, production should decline to a yearly 85,000 oz at a cash cost of $200(US) per oz. An estimated $60 million will see the project through to production.