Gold production in 1989 at Viceroy California bet

With final permitting expected by January, Viceroy Resource Corp.’s (TSE) Castle Mountain property in California should begin production in mid-1989. Addressing the annual meeting recently, D. Ross Fitzpatrick, president, also pointed out that some pre-fabrication work is being done to speed things up.

The company has a working capital of $34 million which is sufficient to place the property into production at 8,000 tons per day, he emphasized. The Bureau of Land Management had approved its plan of operations but two appeals were filed and Viceroy had to chose between the “uncertainties associated with the appeal process” or filing a new plan of operations, which it did.

Fitzpatrick confirmed that regulatory authorities have agreed to “fast track” the project, adding that meetings have been held with environmental groups to address their concerns. In any event, the company expects a draft document by August and final permits by January. “We’ll begin construction then, he said.

Edward Holt, vice-president engineering and development, said that an underground aquifer has been located about two miles from the proposed mine site. Seven production wells were successfully drilled and a 10-year water supply has been indicated, he said.

Leach pad construction should be relatively easy because a flat alluvial valley exists near the three deposits to be mined. The project area is very compact and involves about one square mile so haulage costs should be quite reasonable, he said. A new access road is planned to the nearby community of Searchlight, subject to permitting.

Discussing activity on the exploration front, Dr Harold Linder, senior consulting geologist, confirmed that 500,000 oz of gold has been added to reserves in the past year. As a result, mineable and geological reserves now stand at two million ounces.

Step-out drilling south and east of a 40-ft intersection which returned 0.26 oz encountered low grade mineralization, he conceded. But the company has not ruled out a deep-seated potential on the property. A program of geological mapping is under way which should help Viceroy understand gold deposition on the property, he said.