Goldstake awaits study results on South Dakota tailings project

The tailings, from the Homestake mine operation which has been in production since 1876, are currently estimated to contain 700,000 oz gold, Cleaver said. Whitewood Creek stretches over a distance of about 20 miles from the mine site. Tailings tonnage could be in the 18-20 million ton range.

Pending favorable study results, Goldstake is anticipating a July, 1991, production start.

Last autumn, Goldstake entered into a joint venture agreement with Homestake Mining for development of the tailings. Homestake received a 50% interest in return for $2.4 million (equal to Goldstake’s expenses), four additional payments totalling $2 million and a further $1-million payment when the mining permits are issued. Once the project is in production, Goldstake will share in the capital costs.

Goldstake’s original partner in the tailings project, Strawberry Hill Mining, retains a 20% interest in Goldstake’s 50% interest.

A second exploration project in the same part of the state may also prove to be a lucrative find for Goldstake.

The Stowell property, in which Goldstake has an 80% interest (the other 20% is privately owned), is on strike with the main ore ledges of the Homestake mine. Of immediate interest to Goldstake is an underground target known as the 15 ledge, some 5,000-6,000 ft below surface. A $2.5-million(US) drilling program has been planned for this year.

On the Homestake property, most of the gold mineralization occurs in strata, or ledge, formation. Unevenly formed, the mineralization is located in large centroids and smaller pods found at either end of the centroids. Goldstake is hoping to prove the southward plunging Homestake ore ledges flatten at depth and continue on to the Stowell property.

Other exploration plays in which Goldstake has an interest are claims near the main Hemlo gold camp in northern Ontario and the Hill End gold field in Australia.

The company is awaiting confirmation of a listing on a major Canadian stock exchange.

Goldstake increased representation on its board of directors to five members. Elected to the board were Cleaver, K. R. Besly, P. R. Mills, F. W. Powell and William Hainsworth.

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