Falconbridge options California gold mine

A wholly owned subsidiary of Falconbridge Gold (TSE) recently paid American Gold Resources US$625,000 for an option to purchase a 50% interest in the Royal Mountain King mine in Calaveras Cty., Calif. In turn, American Gold Resources has the right to acquire the mine from a subsidiary of FMC Gold (NYSE). The two companies have not released the details of that deal. Falconbridge Gold’s purchase, which must be completed by mid-March of this year, is valued at an estimated US$9.375 million.

Falconbridge plans to conduct a US$275,000 drilling program on the mine’s Skyrocket deposit. The drilling program is designed to confirm existing reserves as well as investigate the potential of the project.

The Royal Mountain King mine is an open pit operation presently mining from three deposits. FMC acquired the property in early 1990 through the takeover of Meridian Minerals.

According to FMC Gold’s 1990 fourth-quarter report, the mine produced 15,000 oz. gold during the quarter at an average cash cost of US$381 per oz.

The mine has a 3,500-ton-per-day sulphide mill which processed 284,000 tons of ore during the fourth quarter of 1990 at an average grade of 0.071 oz. gold per ton.

No reserve figures were available on the mine, although FMC did say the deposit contained proven and probable reserves of 380,000 oz. gold.

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