Mining and milling plans drawn up for South Pipeline

The South Pipeline deposit in Nevada’s Crescent Valley is now estimated to host a preliminary reserve of about 10 million tons grading 0.12 oz. gold per ton at a cutoff grade of 0.05 oz. gold.

The estimate was released by Placer Dome (TSE), which last year drilled 123 holes totalling 100,000 ft. at South Pipeline. The project is held by the Cortez joint venture, 60% owned by Placer Dome and 40% owned by Kennecott. Royal Gold (NASDAQ) holds a 20% net profits interest royalty from production on these claims, while ECM Inc. has a 5% net value royalty.

Local communities recently learned from Placer Dome (on behalf of the Cortez joint venture) of plans to construct a 75,000-ton-per-day open-pit mine and a 5,000-ton-per-day conventional mill and tailings storage facility. The project also includes lower-grade ore which would be processed by heap-leach technology.

The Cortez joint venture sees potential to increase the current resource, and is planning to carry out a substantial program of expansion and infill drilling this year. Engineering and economic studies are also planned as the drill program nears completion.

South Pipeline is about one-half mile south of the main Pipeline gold deposit, also owned by the Cortez joint venture. At last report, the Pipeline gold deposit was estimated to host 16.7 million tons of oxidized material grading 0.21 oz. gold per ton, plus an additional 1.4 million tons of carbonaceous material grading 0.23 oz. gold.

Permitting and economic studies are under way, and overburden removal and plant construction are planned to begin in January, 1994. The new facility is expected to be fully operational in May, 1995, providing jobs to a permanent workforce of 250 and an annual payroll of more than US$9 million. In 1992, Gold Fields Mining filed a legal action challenging title to about 40% of the main Pipeline gold deposit. Placer Dome intends to vigorously defend itself against Gold Fields’ allegations.