Eastmaque output to hit 95,000 oz gold by 1991

Eastmaque’s success stems from two operations, the Cargo Muchacho mine in California and the Kirkland Lake tailings recovery project in Ontario.

The tailings operation, which began production in late 1987, will be adding a third dredge this summer. The additional dredge will enable the company to boost gold production during the summer months. For the fiscal year ending in June, the project is expected to generate an operating profit of $1.5 million(US), Lundin says.

“It’s a good little money machine,” he adds. The Kirkland project is capable of producing 24,000 oz of gold per year by reprocessing old mine tailings.

Eastmaque’s cost to produce an oz of gold total $250(US) per oz and include administration, development and other overhead expenses, Lundin explained. Recoverable reserves stand at 6.7 million tons grading 0.041 oz gold per ton.

Additional gold production is coming from the company’s Cargo Muchacho operation in California. Purchased for $7.5 million from Newmont Mining in 1986, the Cargo Muchacho property consists of two deposits, the Padre Madre and the American Girl Canyon.

Padre Madre has been yielding 1,500 oz of gold per month from a heap leach operation. By September, heap leaching will also begin at the American Girl Canyon deposit, Lundin says. Gold output is expected to exceed 24,000 oz per year. Total heap leach reserves at both deposits stand at six million tons grading 0.049 oz gold per ton.

An additional 1.2 million tons grading 0.233 oz gold per ton is amenable to underground mining. A 500-ton-per-day conventional mill is planned for the deposit, which Lundin says could be in operation by April, 1990.

“Financing of $7 million is required to build the mill,” Lundin adds, noting that a large portion of it will likely be bank financed. When completed, the mill will be capable of producing 36,000 oz of gold per year.

Eastmaque’s success in building gold reserves, expanding gold production and making money at currently depressed prices, has caught the eye of VenturesTrident, a U.S.- based mining investment fund. Ventures has acquired a 12.8% stake in Eastmaque on the open market and has a track record of taking control positions and dismissing management. “If they (Ventures) think we’re going to sleep while they take over, they’re optimistic,” Lundin warned.

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