Lacana expects 50,000 oz a year from Santa Fe

Production from Lacana Mining’s 100%-owned Santa Fe gold property about 32 miles east of Hawthorne, Nev., is expected to begin in September, 1988.

The open pit, heap leach operation is expected to turn out an average of 50,000 oz of gold a year for the first five years of operation. Capital cost of the mine is estimated at $12.1 million (US).

Lacana first became involved in the property in 1983 eventually earning a 51% interest by completing a feasibility study and purchasing the other 49% for $200,000(US) and 150,000 Lacana shares. The company’s interest is subject to production royalties and holding fees.

Estimated mineable ore reserves stand at 8.5 million tons grading 0.037 oz gold and 0.316 oz silver per ton. About 6.5 million tons consist of oxide material and the remaining two million tons are comprised of sulphide ore.

Both types are amenable to cyanide heap leaching, the company says, although the ore will have to be crushed and agglomerated. The dissolved precious metals will be recovered using the carbon-in-pulp process. Recovery rates are expected to average 70% for gold and 22% for silver.

Lacana will manage the operation, and operate the plant but will contract out the mining, crushing, agglomeration and pad loading.

A gold loan may be used to finance the project.