Mahogany/Corona project to start

Gold production from the Jolu project is expected to begin within three months, partners Mahogany Minerals Resources (VSE) and Corona Corp. (TSE) say. Located north of La Ronge, Sask., the mine will be the second gold mine brought to production in the La Ronge camp in recent years. The Star Lake mine, immediately south of Jolu, entered production in January, 1987.

At the site, mill foundations have been poured and a tailings disposal area is nearing completion. The 60,000-oz-per-year mine is expected to have a cash operating cost of $160(US) per oz of gold.

Corona, which holds a 30% interest in the project, earned the interest after arranging a $20 million gold loan which will cover all the capital costs. Proven and probable reserves are estimated at 606,000 tons grading 0.4 oz gold per ton.

At the Fork Lake project, located four miles southeast of the Jolu mine, a decline ramp has advanced 200 m. Part of a $6 million underground exploration program, the decline will enable the partners to examine the high grade zone discovered on the property last year. Saskatchewan Mining Development Corp. holds a 36% interest and is the project operator. Mahogany has a 19% carried interest in the property. Other partners include Golden Rule Resources (TSE) (30%) and Shore Gold Fund (15%).

Kilborn Engineering is completing a reserve study at Fork Lake and has also been awarded a contract for a feasibility study. Based on surface drilling, geological reserves are estimated at 175,000 tons grading 0.72 oz gold.