Nevada Goldfields expects production at Sumich year-end

Production is scheduled to start at the Sumich mine in Kingston Canyon, Nev., this December, says Nevada Goldfields Corp.

With estimated reserves of 1,037,000 tons averaging 0.261 oz gold per ton, the company expects first year production to exceed 70,000 oz gold.

Nevada has a 100% managing interest in the Sumich gold mine, subject to a 50% net profits interest royalty (after the company recovers the first $5 million(US)) and a 5% net smelter return royalty. Nevada also has 100% outright ownership of the associated Kingston mill.

New Beginnings Resources is a 50% joint venture partner in the project.

Commissioning of Nevada’s second project, the Aurora open pit, also located in Nevada, is scheduled for mid-1987. The company says planned production is 20,000 oz gold annually, subject to a 7.5% net smelter return royalty.

The company says its Empire project, located near Denver, Colo., has an outlined resource of 10 million tons of 0.074 oz gold. This project is subject to a 5% net smelter return for the first 12 years of production.

Upon the acquisition of the Aurora and Empire, the company had arranged a private placement raising $10.3 million(US) to fund acquisition and development costs associated with its activities to that point. Also, a non- recourse loan of up to $12 million(US) has recently been negotiated with First National Ltd.

Nevada Goldfields is controlled by Golconda Minerals NL of Australia. It trades on the VSE and recently lodged an application for trading on the TSE.