Houston, Tex.-based
The program, to consist of 150,000 ft. of reverse-circulation and core drilling, is designed to boost proven and probable reserves at the Phoenix project. Only last year, Battle Mountain expanded the project by 1 million oz., to 3.5 million oz. gold in 81.7 million tons grading 0.043 oz. per ton.
The drilling is partly aimed at improving the drill density in high-grade areas of the Virgin fault, which stretches from the highwall of the Fortitude pit into the Battle Mountain formation at the bottom of the pit. The low drill density made it impossible for Battle Mountain to incorporate several high-grade intersections in the 1998 reserve calculation. Among these intersections were 42 ft. grading 0.29 oz. gold per ton, and 60 ft. grading 0.15 oz. gold. The drilling is also expected to reduce the stripping ratio to below 4-to-1.
To the south, in the Greater Midas pit, Battle Mountain has outlined additional mineralization in the West Midas zone. Of 76 holes drilled last year, only 11 were barren. Further drilling will attempt to move mineralization at West Midas into the proven and probable category.
The company is also evaluating additional exploration targets nearby, including the Copper Basin and Iron Canyon prospects.
Meanwhile, Battle Mountain has decided to remove a carbon-in-leach (CIL) circuit from the project after a pilot plant test confirmed recoveries of more than 80% on sulphide material. The company envisions a 20,000-tonne-per-day operation where gravity concentration will recover 60% of the gold, with another 20% coming from a flotation circuit. Elimination of the CIL will save on capital and operating costs, and will result in only minimal recovery losses, the company says.
Oxide material, representing only 10% of current reserves, will be subjected to heap leaching.
Cash operating costs are pegged at US$185-190 per oz., with annual gold production projected to be 300,000 oz. Capital expenditures are not expected to exceed US$165 million.
Assuming permits and approvals are not delayed, Battle Mountain could begin construction by the end of 2001.
Meanwhile, farther afield in the Altiplano region of central Bolivia, the company is looking to extend the life of the Kori Kollo gold mine.
Work on the 200,000-tonne bio-oxidation test heap is on schedule, and drilling at the Llallagua zone has expanded the 35-million tonne resource. Depending on the results of the test heap, the company could begin drilling to establish proven and probable reserves by the fourth quarter. A production decision could be reached by late 2000.
Battle Mountain has located a mineralized breccia unit below the bottom of the Kori Kollo pit. The initial discovery consisted of a fault-controlled breccia that assayed 5.14 grams gold per tonne over 24 metres. The company has since intercepted the unit in five additional holes, including intervals of 47 metres grading 2.24 grams per tonne, and 30.4 metres of 3.33 grams per tonne. The breccia unit, intercepted between 10 and 160 metres below the planned bottom of the pit, remains open at depth and along strike.
On the exploration front, Battle Mountain is focusing on two greenfields projects in Mexico and Peru. Drilling is under way at the El Castillo deposit, north of Durango in northwestern Mexico, while, at the Tres Cruces gold project in northwestern Peru, indications are that the deposit may be higher-grade but with fewer tonnes than originally estimated. To date, the company has drilled 40 holes at Tres Cruces, and plans to test geochemical and geophysical targets by means of stepout drilling
Battle Mountain is earning a 100% interest in Tres Cruces from
On the financial front, Battle Mountain posted a loss of US$13.8 million (or 6 cents per share) for the first quarter, compared with a loss of US$3.5 million (2 cents per share) for the corresponding period of 1998.
The loss in 1999 was largely the result of a US$10.4-million non-cash writedown of the company’s investment in Niugini Mining. The writedown stemmed from a 16% drop in the value of Niugini’s 17% stake in
Battle Mountain classifies its interest in Niugini and Lihir as an asset held for sale.
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