A feasibility study for Viceroy Resources’ Castle Mountain property in California concludes the project will be a “higher than average grade open pit heap leach gold mine with favorable operating conditions and low production cost estimates.” According to D. Ross Fitzpatrick, president, “economic projections indicate a highly profitable project at present gold prices.”
Mr Fitzpatrick notes engineering, preproduction planning and metallurgical test work are now under way to optimize operating efficiencies. Also, during the past three months drilling has increased reserves in all deposits and a new reserve calculation should be completed by October. Reserves were previously stated at 24 million tons grading 0.06 oz gold.
As of June 30, the company had a working capital of $18.6 million, the result of a private placement of 900,000 common shares at $16.78 per share to Hemlo Gold Mines. In addition to the private placement, Hemlo has agreed to advance $10 million for production financing which is convertible into 595,948 common shares at $16.78 each.
Preproduction stripping and construction are scheduled to begin this month upon approval of the company’s plan of operations. The planned production rate is 8,000 tons of ore per day or 100,000 oz gold annually.
An aggressive drill program is planned shortly on 10 more drill targets identified on Viceroy’s exclusive 10-sq-mi land position. Hemlo Gold has also started its program which will see it spend $5 million to earn a 50% interest on the remaining 38 sq mi of claims currently 100%-owned by Viceroy.
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