Viceroy takes over Illinois Creek gold mine

In addition to taking over management of the Illinois Creek gold mine in west-central Alaska, Viceroy Resources (VOY-T) is considering expanding its business to include reclamation services.

Under an agreement reached with the Alaskan government, Viceroy will confirm known reserves by drilling 29 holes totalling 4,200 ft. The program, budgeted at US$200,000, will be concentrated on one of two pits.

Resources in mid-1997 totalled 6.8 million tons averaging 0.064 oz. gold per ton, equivalent to 440,000 oz.

The company has agreed to manage the site through to March 2000, including overseeing production from residual heap leaching. The operation currently produces 400-500 oz. gold per month.

Viceroy will also prepare a reclamation plan by the end of January 2000.

Alaska’s governor, Anthony Knowles, has endorsed the agreement, citing the operating and reclamation experience of Viceroy, which operates the Brewery Creek gold mine in the Yukon.

“Their expertise will be invaluable to assure us that the Illinois Creek mine is properly operated and reclaimed,” Knowles said.

Billed as the northernmost heap-leach mine in the world, Illinois Creek has a troubled history. Design problems in the leach pads delayed production nearly a year until July 1997, and subsequent dry weather and a depleted water supply prevented the operation from reaching full production. The state took possession after Dakota Mining defaulted on the mining lease at the end of 1997.

Dakota’s operating subsidiary declared bankruptcy in May 1998. The company’s shares were later delisted from the Toronto and American stock exchanges.