Owing to lower than expected gold and silver production, Reno-based junior Metallic Ventures Gold (MVG-T) has suspended mining at its Esmeralda gold project, situated 100 miles southeast of Reno, Nev.
Metallic says that, after initiating underground mining at the site ealier this year, it had tried unsuccessfully to reduce costs and optimize production to ensure future positive cash flow.
Ore had been processed on site at a recently re-furbished 350-ton-per-day, carbon-in-leach mill.
“We could not allow the current negative cash flow situation at Esmeralda to continue and potentially threaten our ability to fund the development of our Converse and Goldfield projects [in Nevada],” says Chairman and CEO Jeffrey Ward. “We continue to have no debt and our current cash balance of approximately US$18 million is sufficient to fund the development of both of these projects.”
On a brighter note, the company reports that the total measured and indicated resources at Converse have more than doubled to 3.9 million oz. gold, comprised of 263 million tons grading 0.0150 oz. gold per ton. An additional 35 million tons at a simialr grade lie in the inferred category.
The figures are based on 155 drill holes, mostly spaced on 400-ft centres, totalling 103,979 ft.
“Given this increase, we have decided to immediately move the Converse property into the feasibility stage and to allocate more of our resources to this project in the future.”
Next, Metallica will carry out condemnation drilling and additional exploration drilling to further define the exterior limits and structural trends of the deposit.
Metallurgical testing is underway and additional permitting will be conducted for use in the feasibility study and development of the project.The 11-sq.-mile Converse property is 30 miles southeast of Winnemucca, Nev., at the southern end of the prolific Battle Mountain trend.
Metallic acquired a quarter-interest in Converse in March 2001 through the acquisition of Romarco Minerals’ Nevada gold assets. Since 1995, it had been a joint venture among Romarco (with 25%), Newmont Mining (50%), and UUS (formerly Uranerz), a subsidiary of Cameco (25%).
In November 2002, Metallic acquired the remaining 75% interest in Converse for US$750,000.
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