First phase oxide mine at Ivanhoe gets green light

The new heap leach mine will process oxide reserves in the Hollister deposit as the first step in the ongoing development of surface and deep gold mineralization (both oxide and sulphide types) found on the 106,000-acre property.

According to the updated report prepared by Pincock, Allen & Holt, current oxide proven and probable mineable reserve in the Hollister deposit stand at 18.4 million tons at an average gold grade of 0.035 oz gold per ton, up substantially from the 5.6 million tons reported last fall.

Galactic notes that the deposit remains open to further expansion and reserve delineation in several directions and to depth.

The report estimates that the Hollister oxide mine will produce 58,400 oz gold in its first full year of production, increasing to 105,600 oz in year two, and then averaging about 80,000 oz for each of the next four years. Galactic is projecting that gold recoveries for the oxide orebody will be about 77% based on its metallurgical testing to date.

Capital costs for the first phase operation are estimated at $24.6 million(US), which includes the purchase of a new mining fleet.

Construction is expected to begin this summer, with production from the near-surface deposit to begin in 1990 using conventional open pit mining and heap leach processing.

Galactic now has two gold mines in production, the 100%-owned Summitville mine in Colorado and the joint-ventured Ridgeway mine in South Carolina.

The company’s latest financial results show a $39.9-million write- down of producing property assets at the Summitville mine, which brought about a net loss for the year of $45.2 million. The loss at Summitville before the write-down was $1.9 million, compared with net income in 1987 of $7.7 million. Precious metal sales in 1988 were $29.7 million, compared with $40.4 million in the previous year.

The company is expecting to return to profitability this year as a result of its 48% share of production from the Ridgeway mine which is operated by partner British Petroleum Minerals. The mine was officially opened in late January of this year and is now in full commercial operation.

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