Atna’s Briggs mine produces ‘golden’ stream

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 California, has averaged over 80 oz. of gold production per day for over a month and, Atna says, not only has production been consistent, but it has also been better than expected.

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

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

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

But over the life of the mine that number is expected to drop considerably and average out in the US$500 to $525 per oz. range.

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

While the mine has processed more ore with 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.-which was higher than the US$893 per oz. cash costs it reported for the quarter previous.

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

Also factoring in were higher fuel costs and an increase in life-of-mine strip ratio.

That increase in strip ratio came as a result of safety concerns as the slope angle on the eastern sector of the main pit was reduced. While the move means greater safety for workers it also brings an uptick in the strip ratio for the pit.

To make up for the loss in potential revenue that comes with a higher strip, Atna says it is looking for productivity improvement and cost containment opportunities.

Atna began construction on Briggs in the fourth quarter 2008 with the first gold pour was completed in May 2009.

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

To date, Atna has spent roughly 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 $3.2 million leach pad expansion.

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

Briggs recently had its proven and probable reserves updated, with the latest estimate putting 10 million tonnes into reserves grading 0.75 grams gold for 232,667 oz.

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

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

In Toronto on Feb 26 Atna shares were off a penny to 62¢ on 123,000 shares traded. The company’s shares have traded between 56¢ and 99¢ over the last 52-week period and it has 83 million shares outstanding.