Homestake Mining aims to expand Down Under

Homestake Mining (HM-N) is focusing on expanding reserves at two gold mines in Australia, following its recent acquisition of Aussie producer Plutonic Resources.

At the Lawlers mine in Western Australia, the company has drilled 62 holes since April. It has also been exploring the regional Glasgow Lass mineralized trend, which stretches for almost 5 km.

Lawlers is characterized by down-plunge extensions of stacked quartz veins hosted in near-vertical sandstone lenses. Underground mining recently started at the southern end of the New Holland pit, and a second decline from that pit has gained access to lower ore zones.

The drilling has focused on the New Holland, New Holland South and New Holland East deposits, which were subjected to a total of 37 holes. These intersected significant mineralization in all but two holes. Twenty-five holes tested the Genesis and Genesis East deposits. Highlights are as follows:

q Hole 19, drilled from underground, hit seven intervals of more than 1 metre grading between 3.7 grams and 128 grams gold per tonne, with the longest interval being 3 metres of 24.8 grams.

q Hole 21 encountered an 11-metre interval grading 6.9 grams.

q Hole 23 hit seven intervals of more than 1 metre ranging from 5 to 74 grams.

Of the reverse-circulation holes drilled at New Holland from the surface, six hit multiple ore zones.

Homestake has increased annual gold production to 82,200 oz. and reduced cash costs per ounce to US$191 from $229, though a portion of this reduction is attributed to the devaluation of the Australian dollar.

The drilling is part of a US$3-million program at Lawlers. Two drill rigs are being employed, and plans call for a third decline to be driven from the Genesis pit in early 1999.

“Results are verifying continuity of mineralization along the Glasgow Lass trend and are expected to lead to a significant growth in reserves and resources at Lawlers,” says Homestake Chairman Jack Thompson, who spoke to The Northern Miner at the Mining Investment Forum in Denver.

Meanwhile, Homestake is spending A$11 million (US$6.8 million) exploring its Plutonic mine, also in Western Australia, which has a resource estimated at 6 million oz. And at the Centenary-Darlot operation, a second decline is being driven at a cost of A$3 million.