Atna Gets Briggs Back Into Production

Atna Resources (ATN-T) has produced a steady enough stream of gold to announce that its Briggs mine is in commercial production.

The mine, which sits in Inyo County, Calif., has averaged over 80 oz. of gold production per day for over a month.

The company says mining of ore and extractions from the leach pad have both exceeded anticipated results and production at the mine will increase further as mining productivity improves and ore grades increase throughout the year.

If all goes according to plan, Briggs will turn out between 36,000 and 40,000 oz. of gold for the year and bring positive operating cash flows. For 2009 the mine produced 11,198 oz. of gold.

Cash cost for gold production in 2010 is estimated to be US$600 to US$625 per oz.

But over the life of the mine, that number is expected to drop to the US$500-US$525 per oz. range.

As with most mines, getting Briggs to its present state hasn’t come without problems.

While Atna processed more ore in each successive quarter in 2009 — it went from milling 467,000 tonnes in the first quarter to 1.3 million tonnes by the fourth — total cash costs per oz. were high.

Atna reports that for the fourth quarter, cash cost came in at US$923 per oz., compared to the US$893 per oz. for the quarter previous.

The company blames the higher costs on shortages of trained labour and mining equipment, and problems with leach pad dynamics.

Other factors were higher fuel costs and an increase in strip ratios.

That increase in strip ratios resulted from the slope angle on the eastern sector of the main pit being reduced for safety reasons.

To make up for the potential loss in profit that comes with a higher strip, Atna says it is looking to improve productivity and contain costs.

Atna began building Briggs in the fourth quarter of 2008 and poured its first gold in May 2009.

The historic mine produced roughly 740,000 oz. gold from 1996 to 2004 via the heap-leach pad.

To date, Atna has spent US$15.7 million on the project. Capital spending for 2010 is expected to come in at US$5.1 million. That sum included a US$3.2 million leach pad expansion.

Atna says the expansion will add an additional 6 million tonnes of annual capacity.

Briggs recently updated its reserves, with the latest estimate putting 10 million tonnes into reserves grading 0.75 gram gold for 232,667 oz.

But the facility could soon be drawing from a nearby deposit as well.

Atna released a new resource estimate for the Cecil R deposit, which sits just 8 km north of Briggs.

The new estimate is 4.9 million tonnes grading 0.45 gram gold for 89,370 contained ounces. The estimate included an additional inferred resource of 7.4 million tonnes grading 0.43 gram gold per tonne for 125,820 oz. gold. Those numbers are the result of using a very low 0.14 gram gold per tonne cutoff grade.

Atna’s president and chief executive James Hesketh says the deposit — which is amenable to open pit mining and accessible by road — should extend the operating life of Briggs.

The company has launched a preliminary economic evaluation of the deposit to determine if it makes sense to develop it alongside Briggs.

Atna is also building the Reward mine in Nevada. The company recently received a key permit that will allow it to accelerate development of the project while it is currently updating a resource estimate.

The company also has ongoing exploration projects at other sites in Nevada, California and Wyoming.

Atna’s shares have traded between 56¢ and 99¢ over the last 52- week period and the company has 83 million shares outstanding.