Giant Bay begins drilling Bering Sea placer project

Another innovative mining practice has attracted the attention of Giant Bay Resources (TSE). One of the pioneers in bioleaching refractory gold ore, the company has turned its attention to exploring offshore placer leases located in the Bering Sea at Nome, Alaska.

The NomeGold joint venture, a partnership between Giant Bay and Coastal Exploration, has been formed to explore the leases which are adjacent to property being mined by dredging by Inspiration Gold. The latter recovered 30,000 oz of gold from 64 acres in the 4-month 1987 season.

Around-the-clock drilling started in late March. In total, 140 drill holes are planned at a cost of $300,000(US). Drilling will be done from the ice 400-3,500 ft from the shoreline through 10-35 ft of ice and water. The drill holes will penetrate between 30 and 50 ft of sand and gravel.

Of the 10,000 acres, approximately 2,500 are governed by a State of Alaska mining lease and the balance by applications for OPPs (offshore prospecting permits).

Giant Bay’s President Claus Jensen says mining could start in summer of 1989. “Because of prior sampling, U.S. government work and the proximity of Inspirations’ mining, Giant Bay is confident that drill results will support a production decision, preceded by test dredging and feasibility work this summer,” he says.

Jensen estimates that dredging 60 acres per season would produce 30,000 oz of gold at a cost of approximately $200 per oz. Cost of the dredging, recovery equipment and working capital is between $7 and $12 million.

Giant Bay is providing all the financing to production to earn a 50% interest. It would receive 90% of cash flow until payback plus additional percentages of cash flow before the 50/50 agreement is phased in.