Miramar readies for production

A feasibility has prompted Miramar Mining (VSE) to proceed with plans to mine the Bonanza zone at its Golden Eagle mine near Virginia City, Nev.

Miramar owns a 60% interest in the property while its 16%-owned affiliate, American Eagle Petroleum, owns the balance.

Proven minable reserves are estimated at 362,000 tons grading 0.064 oz. gold and 0.97 oz. silver per ton at a strip ratio of 3.44-to-1. The reserve is based on 32 holes drilled in 1991 and a further 24 drilled last year. Diluted minable reserves in three of the mine’s zones, including the Lady Bryan, Berry and Bonanza, total 1.16 million tons grading 0.056 oz. gold and 0.56 oz. silver. The overall strip ratio is 4-to-1.

Based on a recovery of about 75% for both silver and gold, the company projects cash production costs of about US$225 per oz. of gold. Miramar has all mining and processing equipment in place but will have to expand its heap-leach pad space for an additional 400,000 tons. The estimated capital cost (including ancillary items) of doing so will be US$150,000. The company expects to finish constructing the pad shortly and to begin mining the Bonanza zone in July at about 2,000 tons per day. Miramar did mine some of the Lady Bryan zone last year, stacking 80,000 tons at an average grade of 0.05 oz. gold, before closing down operations for the winter.

Net production for the year ended Nov. 30, 1992, totaled 2,459 oz. gold and 37,827 oz. silver.

The mine broke even last year, said Vice-president Stephen Quin. But off-site expenses, depletion and amortization pushed the company into the red, with a net loss of $1.1 million or 13 cents per share. After changes in working capital, Miramar reported a cash flow deficit of about $917,000 for the year. As of Nov. 30, Miramar had about $1.1 million in working capital, a note payable for $200,000 and about 9.5 million shares outstanding.