Gold City producing gold at Indian River placer bet

After brief delay, gold production is under way at Gold City Resources’ (ASE) placer operation at Indian River, Yukon, the company said recently.

Thought to contain about two million oz of fine gold, the Indian River claims are sitting on 15,000 acres of gold-placer mineral rights about 35 miles southeast of Dawson City.

With a 55% stake, Gold City is operating the project in a joint venture with Dawson Eldorado Mines (VSE) (22.5%) and the Hughes- Lang Group (22.5%). Dawson Eldorado is Gold City’s largest shareholder with a 25% interest.

High seasonal run off river water inhibited access and equipment installation for two weeks while Gold City was preparing the three pits for mining. But equipment for all operations is now on site and normal conditions now prevail.

According to Gold City spokesman J. F. Angus, the company will spend about $1.5 million at Indian River before the mining season ends in October. With three large sluice boxes and three large pumps capable of handling 6,000 to 8,000 gallons of water per minute on site, operating costs are estimated at about $325 per oz.

Plans to raise $1,750,000 via a private placement fell through recently but Angus said the company is financially equipped to fulfill its obligations to the joint venture until Indian River produces its first cash flow.

President Paul White said the Quartz pit is now producing round the clock, the McKinnon pit was scheduled to begin operations June 10 and the Ruby pit should be producing gold this week (June 20).

Production at the rate of 25-50 sluice-run oz per day from each of the three pits is expected to reach 10,000 oz by October, said White.

Meanwhile, the company will continue to monitor grade levels on a daily basis and, if the grade level shows any drop-off, enough ground has been prepared to facilitate production rate increases of up to 50%. Grade levels are being monitored to make sure the operation maintains its 25-50-oz-per-day level of gold production.

Next month, Gold City will start work on behalf of two yet-to-be- named companies at two additional exploration projects in the Indian River area.

Although negotiations are still taking place, Gold City will retain a back-in right to one of the operations in 1989, once full production is achieved.