Coin Lake’s Golden Reward enhanced

Toronto-based Coin Lake Gold Mines (TSE) says two important developments have recently enhanced the potential of its Golden Reward project in the Black Hills area of South Dakota. Based on additional drilling and a revised mining plan, mineable reserves for the Golden Reward deposit have increased sharply to 13.1 million tons of leachable oxide ore averaging 0.042 oz gold per ton. This represents a 58% increase in tonnage from the 8.26 million tons of mineable reserves averaging 0.045 oz gold reported previously.

At the same time that ore reserves have been revised upward, mining costs have been adjusted downward. The cost of mining at the planned open pit operation will decrease because of a reduction in the proportion of waste to be removed, the company says.

Under the revised mining plan, the stripping ratio becomes 2.1-to- 1, compared with the 2.5-to-1, previously reported.

Coin Lake’s Chairman Thomas Skimming says “construction and development at the Golden Reward project are proceeding on schedule.” The commencement of gold production is expected in early 1989.

“The increase in the gold reserve base is an important development for the long-term future of the Golden Reward project,” Skimming says.

The open pit, heap-leach mine is scheduled to produce at an annual rate of 65,000 oz gold and 50,000 oz silver.

The current geologic reserve estimate for the Golden Reward deposit is 23.25 million tons grading 0.042 oz gold per ton. Definition drilling to convert geologic reserves to additional mineable reserves is in progress.

The past-producing Golden Reward mine turned out 1.34 million oz of gold during its heyday, between 1888 and 1918. By the time of its closure in 1918, the Golden Reward was honey-combed with 35 miles of underground workings. The current joint venture will mine the oxidized gold mineralization surrounding the many shallow caved workings on the property, as well as develop sulphide and deep Precambrian ore.

Coin Lake Gold has a 33.3% interest in the Golden Reward Mining Co., a U.S. joint venture which is conducting the exploration, development and production on the property.

In other news, the company reports that a recent South Dakota referendum has rejected proposed changes in legislation which would have resulted in increased operating costs for mining companies.