Omni leasing Venus mill to process Skukum ore

By leasing the former Venus mill from an affiliate, Omni Resources (VSE) hopes to have its Skukum Creek gold property in production later this summer. The mill was previously leased from United Keno Hill Mines by Skukum Gold (VSE) which can earn a 40% interest in the Skukum Creek property by putting it into production.

Skukum’s lease agreement with United Keno is for two years with an option for another two. Under its agreement, Skukum will pay the cost of retrofitting and upgrading the 100-ton-per-day plant to a 250-ton cyanide/flotation mill at an estimated cost of $1.5 million. The plant is rumored to have structural problems which no doubt would have to be rectified in the program.

Omni says “recent metallurgical break-throughs indicate that a high recovery of over 97% for gold and silver can be obtained with a cyanidation/flotation process.” The Skukum Creek orebody has a relatively high arsenic content which can inhibit precious metal recoveries. The company says exploration, development, design work, engineering and permitting should be completed next year and construction of its own milling facility could begin in June, 1989.

Reserves are currently 821,000 tons averaging 0.23 oz gold and 8.9 oz silver. Within this inventory is a higher grade portion of 183,000 tons grading 0.58 oz gold and 16.5 oz silver.