U.S. Report Boom in Nevada spreads to neighboring states

Mineral deposits have no respect for state boundaries. That explains why Nevada’s mining boom has spilled over into almost every western state. Precious metals are still the big attraction in neighboring Idaho where smaller companies, including a good number of Canadian juniors, have found it easier and less expensive to acquire a land position.

Idaho’s “big one” is the Beartrack deposit near Salmon held by operator Meridian Minerals and partner Canyon Resources (NASDAQ). A feasibility study is expected to be completed this year and permitting is under way for a proposed open pit, heap leach mine. Although a new reserve calculation is in progress, geological reserves were last reported (late 1988) as 37 million tons grading 0.055 oz. gold.

Atlanta Gold (TSE) has been tied up in legal battles with an unsuccessful takeover candidate. Now that the matter is resolved, it is looking to develop the metallurgically complex Atlanta gold property in Elmore Cty. If approval is given, the company would first mine the East pit (one of two on the property). East pit reserves are reported as 8.27 million tons grading 0.087 oz. gold.

Having brought on stream the Champagne mine last fall, Bema Gold (TSE) and partners plan to develop several other small open pit, heap leach gold-silver mines in Idaho. The Buffalo Gulch and Erickson Reef deposits are expected to be brought on stream this summer.

The Yellowjacket property in Lehmi Cty. contains a small, low- grade gold deposit that partners Shamrock Resources (VSE) and United States Antimony (NASDAQ) hope to develop. Now at the prefeasibility stage, the near- surface deposit is reported to contain 407,112 tons averaging 0.11 oz. gold.

Nerco Minerals, a unit of Nerco (NYSE), is well into the permitting process for a new gold-silver mining operation near its DeLamar mine in Owyhee Cty. The Stone Cabin project will be a satellite operation of DeLamar.

Precious metals may be the main attraction in Nevada and Idaho, but copper is still king in the neighboring states of Utah and Arizona.

The big news in Utah this year is a US$227-million expansion at the Bingham Canyon copper mine operated by Kennecott, a unit of RTZ. The expansion will boost daily production by 35,000 tons, with construction expected to start in June. Kennecott’s overall copper production in Utah is expected to increase to 270,000 tons copper per year from 235,000 tons as a result of the expansion.

Arizona is holding its ground as the leading copper producing state. But a growing number of companies have begun to explore its potential for precious metals.

Although best known as a modest-sized gold producer in Quebec’s Val d’Or mining camp, Malartic Hygrade Gold Mines (VSE) is looking to a spring opening for its recently acquired Congress gold mine near Wickenburg in this state.

Construction of a 350-tons-per- day mill is nearing completion on site, and when up to full capacity it is expected to add about 32,000 oz. gold per year to the company’s existing production from Val d’Or. Unlike most new mines in the U.S., Congress is a underground mining operation with existing minable reserves of 480,000 tons of 0.29 oz. gold. Malartic will be carrying out exploration programs aimed at increasing reserves in other areas of the property.

South Atlantic Ventures (VSE) has slated a mid-1990 startup for its Oracle Ridge copper-silver project near Tucson, Ariz., a joint venture with Continental Materials.

Before making its positive production decision, South Atlantic as operator completed a feasibility study for a 285-tons-per-year mine and mill to be developed on the property. Oracle Ridge is reported to have proven and probable reserves of about four million tons grading 2.33% copper and 0.67 oz. silver. (A cutoff grade of 1.5% copper, plus a similar amount of possible reserves, is used.)

A fast-track exploration program by Norgold Resources (VSE) and partner Asarco (NYSE) on the Yarnell mine property, a former producer near Wickenburg, has led to the delineation of a bulk tonnage gold deposit.

A feasibility study is considered likely this year, aimed at development of an open pit, heap leach mining operation. Geological reserves are reported by Norgold as 8.4 million tons grading 0.042 oz. gold.

Environmental opposition and time-consuming permitting procedures have taken the wind from the sails of a number of companies hoping to develop mines in California.

The latest is Plexus Resources, which was recently denied a permit by authorities in Yuba Cty. to mine its 50% owned joint venture Western World copper deposit. The company has filed a writ of mandate in the California courts to overturn this decision.

Despite delays relating to environmental and other concerns, Viceroy Resource (TSE) is in the final stages of permitting for its proposed 8,000-tons-per-day Castle Mountain heap leach gold project in San Bernardino Cty. The deposit, minable by open pit methods, contains proven and probable reserves of 24.6 million tons grading 0.047 oz. gold, plus possible reserves of an additional 13.4 million tons of similar grade.

Amax Gold (NYSE) and partner U.S. Gold (NASDAQ) are looking to a 1992 start for production at the Hayden Hill open pit gold mine project north of Susanville. Hayden Hill, a combined heap leach and 3,500-tons-per-day milling operation, is expected to produce 145,000 oz. gold and 445,000 oz. silver annually for at least eight years.

The proposed US$72-million mine will have the distinction of being one of the lowest-grade, precious metal mines where conventional milling is used. Proven and probable reserves are reported as 45.3 million tons grading 0.032 oz. gold and 0.22 oz. silver.

Glamis Gold (TSE) was recently granted the final permits to bring its main Yellow Aster pit into production in Kern Cty. Minable reserves are estimated at 11.43 million tons grading 0.022 oz. gold per ton. And Eastmaque Gold Mines (TSE) is expanding production at its Cargo Muchacho mine near Ogilby, a combined heap leach and milling operation that will treat both open pit and underground reserves.

Royal Gold (NASDAQ) is in the permitting stage at the Long Valley gold deposit in Mono Cty., where it is earning a 60% interest. Royal Gold hopes to develop an open pit, heap leach mining operation based on reserves of 1.8 million tons proven and 0.4 million tons probable, all at a grade of 0.023 oz. gold.

Although work remains to be done to prove up the numbers, Plexus is eyeing production at its recently acquired Bornite polymetallic project east of Salem in neighboring Oregon. This project is reported to contain geological reserves of 3.1 million tons averaging 2.49% copper, 0.023 oz. gold and 0.67 oz. silver.

Pegasus Gold (TSE) is assessing the production potential of the Quartz Mountain gold project in Lake Cty., where it has an option to earn a 50% interest from Quartz Mountain Gold (TSE). Pegasus’ work at this Oregon property is aimed at economic modelling of an oxide heap leach reserve and assessment of a larger disseminated sulphide reserve.

Washington’s newest mine, the Kettle River, was recently brought to production by Echo Bay Mines (TSE). (See Page One story.)

Hecla Mining (NYSE) is well into a US$6.6-million development program to gain access to new reserves at its low-cost (US$94 per oz.) Republic gold mine near the town of the same name. This high- grade mine has produced over two million ounces of gold since 1941.

Although gold projects appear to dominate recent activity, base metal projects are beginning to appear on the Washington mining scene. A unit of Cominco recently agreed to provide funding to Equinox Resources (TSE) for use in the preparation of a bankable feasibility study for the Van Stone zinc-lead project, some 25 miles south of Cominco’s smelter at Trail, B.C.

Equinox is looking to reactivate the former base metal producer which still has operating infrastructure, including a 1,100-tons-per-day mill. The property has existing minable reserves of 1.6 million tons grading 6.5% zinc and 1.5% lead contained within a 7.5-million-ton deposit grading 4.1% combined zinc-lead.

RFC Resource Finance (TSE) is at the feasibility stage with the Pend Oreille lead-zinc deposit, 55 miles south of Trail. Also a former producer, Pend Oreille is reported to have reserves of three million tons grading 9.8% zinc and 1.9% lead. If all goes well, the company expects it could begin mill tune-up by the end of this year for a 1991 production start.