NEVADA AND THE WESTERN STATES — Echo Bay focuses exploration around existing operations

A leaner, trimmer Echo Bay Mines (ECO-X) has shaken itself off after a troubled year and set to work exploring its numerous North American mineral properties.

The past year was marked by dramatic staffing reductions at Echo Bay’s Denver headquarters and the suspension of operations at the Lupin gold mine in the Northwest Territories. The company now faces the challenge of deciding what to do with a smaller staff and reduced budget.

“We haven’t gone away,” says Ralph Bullis, Echo Bay’s director of resource evaluation. “What we can do, we will do.”

The company plans to focus its exploration efforts on its producing properties, particularly those in Nevada. At the Round Mountain mine, a joint venture shared equally by Echo Bay and Homestake Mining (HM-N), Echo Bay has budgeted US$1.6 million for exploration this year.

The companies plan to re-evaluate several anomalies that were defined on the property last year. They are also planning some deeper drilling along the perimeter of the pit in the North and South Deep Feeder zones.

At the McCoy/Cove gold mine, also in Nevada, Echo Bay has allocated US$500,000 for exploration work in 1998. The company plans to compile a database for old and new targets around the mine before resuming drilling

the Deep South target, near the Cove pit, and the northwestern part of the pit. Other satellite targets, including North Star and Hidden Valley, will also be drilled.

Last year, in an effort to bring down production costs, 20% of the workforce at McCoy/Cove was laid off and production was scaled back.

Elsewhere in Nevada, Echo Bay has decided to relinquish the Jessup property and retain the Ratto Canyon, Bald Peak and Anticline properties. The company is farming out the 278-claim South Getchell property to Pinson Mining, a joint venture between Homestake and Barrick Gold (ABX-N), though it retains a 2.5% net smelter return royalty.

Broken Hill Proprietary (BHP-N) is earning a 75% interest in Echo Bay’s Treaty Hill property in Nevada’s Humboldt Cty. by spending US$750,000 over the next four years.

Romarco Minerals (R-T) is earning a 51% interest in the Snowstorm property in Elko Cty. by spending US$1 million over five years.

At the Kettle River mine in Washington, Echo Bay has earmarked US$500,000 for exploration around the K-2 and

Lamefoot deposits. Next door, in Idaho, the company has optioned the Kilgore gold project to Latitude Minerals (LTU-V), which can earn a 49% interest by spending US$2 million over five years. The property contains a known resource of 22.5 million tons grading 0.03 oz. gold per ton, for nearly 700,000 contained ounces.

Rounding out Echo Bay’s exploration picture is the Ogden property in Ontario, where Berland Resources, a subsidiary of Cumberland Resources (CBD-T), is earning a 50% interest by spending $825,000 on exploration over four years. The property is considered a potential satellite deposit to Echo Bay’s Aquarius gold project.