Quartz denies decision

Quartz Mountain suspended trading of its securities for a time last week in order to clarify recently published remarks attributed to its vice-president exploration that implied a production decision for the project had been made by both partners based on advance feasibility information from independent consultants Davy McKee Corp. of California. The companies called the newspaper articles “inaccurate and misleading.”

While the partners say they have received preliminary results from the oxide, open pit heap leach study on the Crone Hill and Quartz Butte deposits, they stressed that “further refinements of the preliminary study will be necessary before any final production decisions can be made on the project.”

Specifically, the partners said the preliminary information received to date “indicates that a reduction in the preliminary capital cost estimates will be necessary to achieve acceptable oxide open pit economics at a gold price of $350-$400(US) per oz.”

To achieve this, Galactic and Quartz Mountain say they will be working closely with Davy McKee Engineering to obtain lower capital costs and enhance project economics by earth-works re-engineering, incorporation of used mining equipment wherever possible and evaluation of conveyor/radial stacker alternatives. But the partners say the most important aspect will be an assessment of the impact of incorporating West Crone high grade vein material and/or Angels Camp breccia reserves to the mine plan, a process which is expected to take about 12-15 weeks.

In addition, the partners report that Davy McKee has initiated an over-all project feasibility analysis which is the evaluation of the gold- bearing sulphide reserves beneath the oxide reserves. Both heap leach and milling alternatives of the oxide and sulphide reserves are to be addressed in the study which is expected to be available no sooner than the end of April, 1989.

As previously reported (N.M., Jan 16/89), dissident shareholders of Quartz Mountain have filed suit against the company in the British Columbia Supreme Court. The suit is believed to contain a number of allegations concerning Quartz Mountain’s relationship and business dealings with Galactic.

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