A study has confirmed the feasibility of expanding the Marigold mine in Nevada’s Battle Mountain trend.
Reno-based
Of this amount, 60.6 million tonnes running 0.99 gram gold (or 1.9 million contained ounces) are classified as proven and probable reserves. The new reserve figure is more than double what it was at the beginning of the year (27.4 million tonnes averaging 1.2 grams gold, or 1.1 million contained ounces), though the average grade has slipped as a result of the dilutive effect of 40-ft. mining benches. Glamis expects cost savings associated with larger mining equipment to more than offset the effect of lower grades.
When the assumed long-term gold price is increased to US$300 per oz., the number of contained gold ounces climbs by 15%. Glamis expects to convert much of the inferred in-pit resources to reserves by early 2002 via ongoing infill drilling.
The annual mining rate is projected to hit 22.7 million tonnes in early 2002, and is expected to climb to 36 million tonnes by 2003. Production is pegged at 82,000 oz. for the current year, and by 2008, it should top 200,000 oz. Through to 2013, total production is projected to exceed 1.6 million oz.
During the recent third quarter, Glamis’s share of Marigold’s production was 14,249 oz. gold, up from 8,189 oz. a year earlier. The increase is attributed to an improved leach cycle. Total cash costs were more than halved to US$160 per oz. For the first nine months of 2001, production tallied to 44,925 oz.; total cash costs were US$168 per oz. Glamis has a 66.7% stake in the mine, which it operates.
The new mine plan incorporates three deposits discovered south of the main Marigold pit last year: the Millennium project’s Terry zone and the sections 30 and 31 deposits. The stripping ratio for an expanded pit is pegged at 3.1:1.
All ore, including the Millennium resource, which is still open along strike to the north and south, will be processed by run-of-mine heap leaching. The entire resource is well-oxidized, and metallurgical tests indicate recoveries similar to those at ongoing operations. Recovery rates for material from the Terry zone expansion is 75%, and 70% for sections 30 and 31.
Initial capital expenditures under the feasibility study are pegged at US$55 million over the first two years, whereas the capital investment required to run the operation over the course of its lifespan is estimated at US$43 million. Total cash costs are US$143 per oz. and total unit costs ring in at US$216 per oz. The project offers a rate of return of at least 20%.
Glamis will fund its share of the project capital via a cross-border equity offering of 10 million shares (completed in late October), for gross proceeds of C$50 million. The financing comprised 8 million shares at C$5 apiece; the underwriters exercised an option to acquire an additional 2 million shares at the same price.
With permits in hand, Glamis has begun stepping up exploration efforts at the Terry zone. A southern expansion is expected to cover the section 30 and 31 deposits.
Glamis has budgeted US$1.5 million for exploration and development drilling at Marigold in 2002.
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