Kimberly buys Rescue

Coeur d’Alene-based junior Kimberly Gold Mines (KMGM-O) has bought the Rescue mine and 120-ton-per day mill in central Idaho, and intends to resume gold production there by next summer.

In return for the various assets and equipment associated with the mine complex, Kimberly will pay the vendors US$200,000 cash and issue 360,000 shares. A 3% net smelter return royalty is payable on production from the property.

By mid-2005, Kimberly intends to begin trial milling, using ore from both Rescue and its nearby Kimberly mine; the longer-term objective is to support sustained operations from both locations.

Gold at Rescue is reportedly found in an east-west-striking quartz vein hosted in granodiorite. Gold mineralization is contained in three separate ore shoots, all of which are open along strike and at depth.

Historical grades are said to have averaged nearly 1 oz. gold per ton, with roughly 60% occurring as free gold and the remainder associated with sulphides.

Prior operators showed that 88% of the free gold is recoverable by a gravity circuit, whereas up to 80% of the sulphide-hosted gold is recoverable by either cyanide leaching or roasting.

The vein that was mined at Rescue apparently continues on to the adjacent Unity mine property, and Kimberly believes there is considerable exploration potential in a half-mile area between the two mines.