A production decision for the Longstreet and Johnson Gulch gold prop erties controlled by Naneco Resources could be made in 1987, the company says in its annual report. The company says that as delineation drilling on the two properties nears completion, plans for bringing the projects to production will have to be made.
Located in South Dakota, the Johnson Gulch project was acquired from Homestake Mining in October. Naneco can earn a 100% interest in the ground by paying Homestake a total of $1 million(US). Homestake retains a 13% net profits royalty. Naneco also assumes a large 6% net smelter return to the original vendors of the property.
Work by Homestake outlined 1.7 million tons of material grading 0.06 oz gold per ton, amenable to open pit mining operations. Naneco is currently completing a 200-hole drill program designed to better define and increase the reserves. The company’s objective is to define five million tons grading 0.04 oz gold per ton.
Naneco also controls the Longstreet gold property in Nevada. Hosting two million tons of reserves grading 0.05 oz gold per ton, the Longstreet property is being drilled with the intention of upgrading potential reserves to the drill- indicated category. Naneco has a 75.4% interest in the property.
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