Canyon adds another Nevada property

Vancouver — Shortly after announcing plans to acquire the dormant Hycroft mine in Nevada, Canyon Resources (CAU-A) has picked up another project in the state — the Reward gold property, near Beatty.

Colorado-based Canyon views the Reward property as prospective for a “relatively high-grade, open-pit mine” that would be inexpensive to explore and develop. Previous operators have already outlined a gold-bearing structure over a strike length exceeding 2,400 ft. to a depth of up to 400 ft.

Over the past 15 years, 100 holes totalling 34,899 ft. were drilled to test the structure, which consists of an intensely sheeted, north-south shear zone and associated veins. Results include 65 ft. of 0.146 oz. gold per ton and 150 ft. of 0.076 oz. gold. The structure remains open and untested at depth, and along strike to the south.

Canyon plans to test the property with a view to developing a minable deposit containing at least 250,000 oz. gold. Based on metallurgical work by previous owners, the company believes the gold mineralization is amenable to recovery by either conventional heap leaching or milling.

Canyon’s only current producer is the Briggs mine in California, which is now nearing the end of its life. Briggs produced 5,234 oz. gold and 3,500 oz. silver in the third quarter of 2004, down from 8,676 oz. gold and 1,500 oz. silver a year earlier.

Canyon also plans to revive the Hycroft gold-silver mine, near Winnemucca, under the terms of an option agreement with mine owner Vista Gold (VGZ-T).

A former open-pit, heap-leach mine, Hycroft produced more than 1 million oz. gold and 2 million oz. silver from 1983 to 2004 (including residual leaching).

Remaining oxide resources stand at 56 million tons averaging 0.018 oz. gold per ton, or about 1 million contained ounces. Minable reserves stand at 37.7 million tons averaging 0.018 oz. gold, or about 713,050 oz.

Canyon’s goal at Hycroft is to develop a heap-leach operation capable of producing 409,250 oz. gold and 1.6 million oz. silver over five years.

The company also owns the McDonald gold project in Montana, which has been stalled by a state ban on the use of cyanide. The company has filed suit against the state seeking compensation for the lost value of the property.