Bridger achieves production at Chilean mine

Initial production has been achieved at the Pepa gold mine in the Maricunga district of Chile. The mine is operated by Compania Minera Horus Limitada, a 65% owned subsidiary of Bridger Resources (VSE). The balance of the operating company is owned 25% by Segex Ltda., a Chilean mining and contracting company, and 10% by Prosinor Sociedad Anonima. Production at the mine and mill averaged 130 tonnes per day during February with an overall recovery of 65%.

Anthony Floyd, president of Bridger, noted the mill is treating about 210 tonnes per day, much of it development ore, resulting in an average grade of 10-12 grams gold per tonne.

Floyd expects throughput to increase to 250 tonnes per day during April and gold grades to increase to 20 grams per tonne as the mill begins processing more stope ore. He also sees overall recoveries improving to over 75% and estimates that mining and milling costs (before interest costs and taxes) will be about US$72 per tonne.

At last report the Pepa mine had underground reserves in all categories of 461,000 tonnes grading 19.2 grams.

The exact ownership of Horus is yet to be determined since Segex is earning a maximum interest of 25% by bringing the mine into production. Its interest could be somewhat less depending on when the project is defined as complete.

Segex supplied certain mining and milling equipment to the property while the majority of its expenditures are treated as a loan to Horus at an interest of 13% per annum. To date Horus owes Segex US$3.2 million, to be repaid over a 24-month period in monthly instalments not to exceed 30% of net operating profit.

In addition to the loan from Segex, Horus owes Bridger US$1.3 million, again related to expenditures on the Pepa mine.

Horus’s major liability is that derived from the original purchase of the property. The company paid US$12.3 million for the property, of which US$2.8 million has been repaid. The remainder is due in quarterly installments of US$850,000 to September 1, 1992 plus a final payment of US$990,000 on Dec. 1, 1992.

Bridger has no debt and about 8.5 million shares outstanding (10.5 million fully diluted).