Chelsea’s Spotted Horse profitable in past month

The high grade gold mining operation of Chelsea Resources near Lewistown, Mont., has started to turn a profit, according to Fernando Nuflo-Moya, chairman. He confirms that “since the second week of November revenue from the sale of gold and silver produced at the Spotted Horse mine in central Montana has exceeded operating costs.”

Head grades have also increased as expected and the agitation leach cyanide circuit has operated above its 50-ton-per-day rated capacity, he notes. Ore from the Discovery shoot is grading 1.13 oz gold “in excess of the projected grade,” and mill recoveries have reached 96% for gold and 89% for silver, he adds. The mine and mill will reach sustained full design capacity by year-end.

Exploration work has identified two new mineralized structures in the hangingwall of the Crescent stope on level No 8 where one intersection returned 6 ft of 4.1 oz gold and 2.5 oz silver. The old Mud stope vein was encountered on level No 8 and an ore pass has been installed alongside it to the seventh level. Exploration is also under way on level 8 for the Bonanza pipe. Surface drilling between the Gold Hill porphyry and the Madison limestone has generated some more encouraging results. Nuflo- Moya says the Kentucky Favorite vein was hit in several drill holes, one of which assayed 0.95 oz gold over 5 ft and 0.26 oz gold over 4 ft. The shallow intercepts were all above 105 ft. “These intercepts indicate extensions of mineralization both northeast along strike and downwards from the previously known stope.”

In addition, mineralization has been traced on surface in the Smith Cut vein for a distance of 750 ft south from near the Spotted Horse Shaft onto the adjacent Maginnis property. Values up to 0.39 oz gold over 3 ft were found in the surface work and the vein has been confirmed by drilling at depth.

“Underground exploration and development of this mineralization from two headings on the Maginnis property and one heading from the A drift of the Spotted Horse mine has commenced,” he adds. A few holes have been drilled into the breccia pipe on top of Gold Hill but only low grade values were indicated.