Pelham and Cumo to mine Louanna tailings

As soon as the weather permits, production will begin again at the Louanna gold mine at Nakina, Ont.

After a 3-year break, partners Cumo Resources and Pelham Gold are about to start a 2-stage program at the Louanna property which shut down in November, 1984, after low gold prices made the operation uneconomic.

Capable of operating at 200 tpd, through existing facilities, the mine requires a gold price of $350(US) per oz to operate profitably, Cumo says.

In its start-up year (1982), the mine produced 16,000 oz grading 0.20 oz gold per ton and an independent survey conducted in 1984 says 15,000 tons are currently “drill- indicated” and mineable.

“We have a couple of geologists on site and we’ll start work when the weather breaks, said Pelham President Anthony Grdina.

Under an agreement with Van couver-based Cumo, his Alberta- listed company will spend $5 million to increase its interest in the property from 40% to 60%. Cumo’s interest currently stands at 60%.

As a result of a previous agreement, Consolidated Louanna Gold Mines retains a 4% royalty interest. After a $2 million cost overrun in bringing the property to production, Louanna transferred control of the mine to Cumo in 1984.

In the first stage of a $5-million program funded by Pelham, the Vancouver company will process existing gold contained in dumps and tailings ponds. According to Grdina 140,000 tons of tailings grading 0.033 oz gold per ton and some 25,000 tons of surface ore are wait ing to be processed.

Grdina says the tailings are valued at $2.8 million and a buyer for the material has already been found.

The second stage involves a $300,000 diamond-drilling program designed to test the extension of gold mineralization along strike zone in two directions and at depth.