FirstMiss boosts mine reserves

With the long-awaited results from the Turquoise Ridge gold deposit now in hand, FirstMiss Gold (NASDAQ) is proceeding with development plans.

The prefeasibility study identified a resource of 6.2 million tons grading 0.354 oz. gold per ton (or 2.2 million oz. gold), based on a cutoff grade of 0.25 oz. Within this resource, 1.25 million oz. are classified as reserves.

Core drilling has meanwhile led to the identification of another 2.8 million oz., outside the perimeters of the prefeasibility study.

Mineralization is spread out over an area measuring 3,000 by 1,000 ft. and remains open in all directions. All the 81 holes drilled in the area encountered mineralization.

All holes within the study area were drilled on 100-ft. centres, except eight, which were drilled on 50-ft. centres. For the resource area, 200-ft. centres were used.

As a result of the 1.25 million oz. in new reserves at Turquoise Ridge, the company’s overall reserves stand at 2.7 million oz.

The company estimates it will cost US$85 million to bring the underground mine into production.

Major expenditures would include US$26 for development and US$33 million for shaft-sinking. Production, at the rate of 2,000 tons per day, would not commence until mid-1998. According to the study, the company expects to produce gold for US$270 per oz.

The positive results will enable FirstMiss to accomplish one of its long-term corporate goals: a spinoff from parent company First Mississippi (NYSE), which owns 81% of FirstMiss. Its 14.75 million common shares will be distributed on Oct. 20 to shareholders of record. Each shareholder will receive seven-tenths of a common share of FirstMiss for every share of First Mississippi owned.