Atlanta management slate re-elected

Results of the election held during Atlanta’s annual general meeting suggest that the majority of shareholders favor the current management slate and its plans to look for an outright buyer for the company or a joint venture partner for the 100%-owned Atlanta gold project in Idaho.

A dissident slate proposed by U.S. Gold Corp. (NASDAQ) of Denver, Colo., which owns 13.5% of Atlanta, and VenturesTrident Limited Partnership, which beneficially holds a 12.67% interest, had proposed development of the property using U.S. Gold’s proprietary bio-oxidation technology to process the bulk of reserves which are metallurgically complex.

Situated 60 miles from Boise, the Atlanta gold project was the subject of a recent feasibility study by Behre Dolbear-Riverside Inc. and Bateman Engineers. The study focused on the East and West pits and concluded that at current metal prices the most profitable scenario would be to mine the East pit reserves of 8.27 million tons grading 0.087 oz gold.

The study estimates capital costs at $41.63 million, plus $5.8 million in sustaining capital. Operating costs, including general and administrative expenses, are estimated at $248 per oz.

Average annual production is projected at 101,180 oz of gold and 258,100 oz of silver for the first six years, at an average recovery rate of 83.9%. The bulk of the ore would be processed by flotation, bio- oxidation of the flotation concentrate and cyanidation. The remainder of the ore would be heap leached with cyanide. Atlanta Gold projects capital costs would be repaid in 2.4 years at a $375 gold price.

The West Pit contains an additional 6.2 million tons grading 0.049 oz gold with a recovery rate of 80.4% to add 2.5 to 4 years to mine life.

Atlanta Gold said it has retained the investment banking firm of Bear, Stearns & Co. as its financial advisor to investigate ways to increase shareholder value. This will involve looking at proposals from other parties to develop the Atlanta gold project either on a joint venture basis or by an outright sale by Atlanta of the property. Atlanta Gold also authorized Bear, Stearns to solicit bids for the acquisition of all its outstanding common shares. The company then plans to submit all reasonable bids to shareholders for consideration. Concurrently, the company intends to proceed with permitting and funding for the project.

]]>