Development work and mining at the Dome Mountain underground gold mine near Smithers, B.C., is continuing as Timmins Nickel (TSE) brings the property up to operating capacity.
Timmins is earning a 60% interest in the project from Habsburg Resources (VSE) by funding all capital and operating costs until the mine is in commercial production. Habsburg retains a 20% interest in the project until a total of 325,000 tons of material is processed after which the interest increases to 40%.
The joint venture recently signed a milling agreement with Equity Silver Mines which will process the Dome Mountain ore at its mill about 40 miles to the southeast, near Houston, B.C.
The mine is currently operating at about 200 tons per day and Timmins expects monthly production to average 5,000-6,000 tons per month at an anticipated grade of 0.5 oz. gold for a yield of 2,500-3,000 oz. gold per month. Recoveries at the Equity mill are expected to average 84-89% depending on head grades.
Proven and probable reserves at the mine were previously estimated at about 325,000 tons grading 0.36 oz. gold per ton plus an additional preliminary reserve of about 100,000 tons grading 0.52 oz. gold.
Stephen McIntyre, president of Timmins Nickel, noted that mining dilution has been less than anticipated in the reserve estimates, resulting in higher actual mining grades.
McIntyre added that recent drilling returned a number of high-grade intersections which will likely result in a significant increase in reserves. The drilling included a 16.6-ft. intersection grading 0.88 oz. gold per ton in hole 92-5 and two 3.6-ft. intervals grading 2.86 oz. gold and 0.50 oz. gold respectively in hole 92-3. Additional assay results are pending. Habsburg recently signed an agency agreement with L.O.M. Western Securities. L.O.M. will provide corporate financial services including market consulting in return for 150,000 common shares of the company. The shares are payable as to 50,000 on regulatory approval and 10,000 per month thereafter until the full amount is paid.
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