Augusta acquiring Mount Hamilton gold project

Vancouver – Northern Canadian diamond explorer Augusta Resource (ARS-V) is refocusing, south of the border, by acquiring the Mount Hamilton gold project located 70 km west of Ely in White Pine county, Nevada.

The advanced-stage project, situated in the southern-end of the Battle Mountain Trend, will cost the company US$3.6-million in cash and shares, plus a royalty granted to the vendor.

An extensive database of previous exploration and development work exists from previous operators of Mount Hamilton. Historical resource estimates for the project will be independently reviewed by Roscoe Postle Associates enroute to producing a National Instrument 43-101 report.

Both near surface-bulk tonnage and high-grade vein hosted gold mineralization exists on the property.

Mount Hamilton was a previous producing open pit-heap leach gold mine operated by Rea Gold in the mid-1990s. Rea Gold purchased the property from Costain Minerals in late-1993 for US$5.25-million. Costain, which retained a 2.5% NSR, had spent in excess of US$9-million proving up the resource and completing a full feasibility study. An initial resource (pre-NI-43-101) of 8.2 million tonnes grading 1.78 grams gold per tonne and 12.7 grams silver per tonne was outlined at the project in two contiguous ore bodies, the NE Seligman and Centennial.

The mine commenced production in late-1994 from the Seligman pit, producing about 80,000 ounces of gold until operations ceased in June-1997 due to low metal prices. The operation was written-down by Rea Gold who later filed for bankruptcy in late-1997.

As of the latest figures, Augusta reports 19.6-million shares outstanding, giving the company a market capitalization of $5.9-million. Investors leapt on the issue following the acquisition announcement, driving the price up over 60% to the 30 per share level on volume of 1.56-million shares.