Nevada Goldfields brings Aussie flair to golds

After enjoying the fruits of success Down Under, another Australian mining group has set its acquisitive gaze on other lands — namely North America. Golconda N.L., which is currently producing approximalety 20,000 oz of gold per year from tailings retreatment operations in Australia, has its sights on much larger gold production.

Through its 51%-owned Nevada Goldfields Corp., the company expects to boost its gold output to more than 80,000 oz in the next three years.

Created by Golconda in 1984, Nevada Goldfields was given the mandate to research and acquire promising gold assets in North America.

“We came over here, established an operational base, selected a number of properties and went after them,” company President and major shareholder of Golconda, Robert F. Baldock, told a group of analysts and brokers in Toronto.

With three properties in the company’s protfolio, Nevada Goldfields expects gold production to reach a high of 130,000 oz by 1989. First production is expected before year-end from the Kingston mine, near Austin, Nev.

A complete disaster during its brief operational life, which ended on December, 1985, the Kingston mine (then known as the Sumich) never met any of its forecast operating criteria. Nevada Goldfields, after reviewing the situation, blames the mine’s problems on poor equipment, shoddy mine development and mill problems. “The previous operators lost up to 50% of contained gold in the milled rock,” Graham Roberts, a mining analyst with W. I. Carr(UK) Ltd., said. W. I. Carr arranged a $10.3 million(US) offering of Nevada stock in 1985.

New Beginnings Resources holds a 50% net profits royalty on the project, which is expected to yield 41,000 oz annually.

Crews have been on site for more than a month, Mr Baldock notes and the project is on schedule. Despite estimates that the mine will have a life of 6 years at a rate of 454 tonnes per day, the project only has proven and probable reserves of 369,936 tonnes grading 12.51 g gold per tonne (0.364 oz gold per ton). The estimates are based on proven, probable and possible reserves totalling 940,400 tonnes grading 8.95 g gold per tonne (0.26 oz gold per ton).

In fact, most of the company’s reserves on all three projects are in the poorly defined possible catagory which require considerable drilling to prove up.

With respect to the Sumich reserves, Nevada Goldfields notes its consultant says that at least half of the possible reserves could be upgraded to the proven catagory. A relatively small amount of proven reserevs are also available at the Aurora project, expected to enter production by mid-1987.

Located in Nevada, the Aurora project has proven reserves of 55,671 tonnes grading 6.24 g gold per tonne (0.18 oz gold per ton). Combined proven, probable and possible reserves total 431,883 tonnes grading 5.9 g gold and 17.96 g silver per tonne.

Associated with epithermal veins, the Aurora deposits are expected to yield 15,824 oz of gold per year from two open pits and two underground adits. Costs are forecast at $49.80(US) per oz of gold.

The main project in the company’s future plans is the Grace. Located west of Denver, Col., the property is expected to produce the bulk of the company’s gold by 1989 — 64,856 oz per year. Yet, the percentage of proven reserves is the lowest of any of the three projects. Only 8.5% of the total 5.6 million tonnes is proven. Grades average 2.57 g gold per tonne (0.075 oz gold per ton).

The company plans to carry out a drilling and bulk sampling program designed to upgrade reserves. Milling, at a rate of 1,814 tonnes per day, will utilize conventional carbon-in-pulp extraction.