Bema Gold plans full scale production at Champagne mine

Bema Gold Corp. (TSE) announced the decision to proceed with full scale production in mid- January on behalf of the Idaho Gold Corporation, an operating company created to develop and bring several Idaho properties into production. Bema Gold owns 85% of the operating company while Glamis Gold (TSE) holds the remaining interest.

At full production, the Champagne mine is targeted to produce 19,000 oz gold equivalent per year. Capital costs for the open pit mine are low; estimated at only $1.5 million(US) with payback expected within three months.

A pilot heap leach test of 12,000 tons was recently completed, and Bema Gold said recoveries “surpassed lab results and confirmed that no crushing or agglomerating will be required on Champagne ore.”

According to Ian Johnson, chairman of Bema Gold, the test program ran through the coldest part of the winter with no technical problems.

“The main reason it works is because we use drippers buried in ore instead of sprinklers,” he said.

Run-of-mine ore from the test program is reported to have yielded 75% of contained gold within 30 days with low cyanide consumption. An additional 20,000 tons of material grading 0.065 oz per ton gold equivalent is currently under leach. By February, the company estimates recovery of 1,300 oz of gold equivalent from pilot scale production, and 1989 production at 450,000 tons yielding 17,500 oz gold equivalent at a projected cost of less than $150(US) per oz. Costs are expected to rise to $180(US) after the first year of production.

Work to date has defined an oxide orebody containing 2.5 million tons of mineable reserves grading 0.04 oz gold equivalent and two million tons inferred. Stripping ratios are low, estimated at 0.75:1 waste to ore over the life of the mine.

Further exploration work is scheduled to begin this spring on parallel zones and at depth, as Bema Gold believes that excellent potential exists for both additional oxide reserves and for deeper bonanza- type sulphide mineralization. Johnson said the company would use cash flow from the mine to fund ongoing exploration and to develop new reserves.

Cash flow from the Champagne mine is also expected to be applied toward bringing the Buffalo Gulch and Erickson Reef heap leach projects near Elk City, Idaho into production in 1990.

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