Green light flashes for Rea Gold’s Bissett

With one gold mine already in production in Nevada, Rea Gold (TSE) has begun constructing another, this time in southeastern Manitoba.

When the wholly owned Bissett gold mine achieves full production in early 1997, it will be yielding more than 83,000 oz. per year. As a result, Rea’s overall production rate will exceed 140,000 oz. per year. Cash costs over the life of the project are projected at US$238 per oz.

A former producer, Bissett hosts more than 3.5 million tons grading 0.282 oz. gold per ton at a cutoff grade of 0.15 oz. Contained in this resource are more than 1 million oz. of the yellow metal.

While the bulk of reserves are known to lie below the 26th level, about 551,000 tons are believed to exist above.

Rea has called for tenders for the design and construction of surface and underground facilities, including a mine access system for handling 1,000 tons of ore per day. Two intermediate shafts will be eliminated, and the remaining two hoists will be upgraded. To allow access to all minable reserves, the D shaft area will be deepened another 600 ft.

The existing mill and tailings facility will be increased to 1,000 tons per day, and a leach-refinery circuit will be added to permit the production of dore gold on site.

Capital costs are estimated at US$37 million, and Rea currently has cash reserves to cover about half of this total. During the next few months, the company will examine various financing alternatives with a view to completing project financing early next year. The mine development plans are based on an independent feasibility study and more than 6,000 ft. of definition drilling.

Rea Gold started working on the project this spring in anticipation of a positive production decision. Four existing shafts have been rehabilitated to allow access to all levels by development and construction crews. Crews are currently excavating access drifts to facilitate the deepening of the A shaft from the 10th to the 26th level.

Meanwhile, at Rea’s Mt. Hamilton mine near Ely, Nev., a follow-up, 50-hole program of reverse-circulation drilling is under way on the newly identified Chester gold zone.

Exploration work earlier this year further defined a gold soil anomaly over an area measuring 4,300 ft. in length and up to 1,800 ft. in width. An initial 10-hole program tested the eastern side and the central portion of the anomaly at 200-ft. stepouts and encountered two separate horizons of mineralization at depths ranging from 215 to 500 ft.

The 10 holes intersected values ranging from 0.024 to 0.13 oz. gold per ton over widths of 5 to 35 ft.

The new zone is 1.5 miles south of the NE Seligman deposit, which is being mined by open-pit methods. Minable reserves are estimated at 9 million tons grading 0.052 oz. gold and 0.37 oz. silver.