Queenstake ups Jerritt Canyon production

Vancouver – Queenstake Resources (QRL-T) is seeing increased production for its wholly owned Jerritt Canyon gold mine in Elko Cty., Nevada.

The Denver-based company has endeavoured to develop and define sufficient ore to feed increased processing rates in its mill; and they haven’t disappointed. The supply of high-grade ore is expected to increase over the next few months, when mill capacity is maximized by the dryer conditions.

Since acquiring the mine less than a year ago, Queenstake has focussed on long-term development initiatives designed to increase the lifespan of the operation.

Second quarter production is projected to be just shy of 70,000 ounces gold, a 44 percent improvement over the first quarter when operations were hampered by above average snowfall. Production for the third and fourth quarters is expected to average 80,000 ounces, making this year’s estimated output at 280,000 ounces with overall cash operating costs anticipated at about US$280 per ounce.

Underground exploration drilling at the Murray mine identified a new area of high-grade gold mineralization, adjacent to existing workings, with intercepts of up to 9 metres grading 101.8 grams gold per tonne. Further work is planned to test the extent of the ore-grade material.

The Jerritt Canyon mining complex consists of four underground mines (the SSX, Smith, Murray and MCE), a 1.36 million tonne-per-year processing facility and a 26,000-hectare land package with exploration potential. Gold production in 2003 was 302,095 ounces. The mine has produced over 7 million ounces of gold since 1981.Queenstake was propelled to mid-tier gold producer status through its purchase of the Jerritt Canyon mine from AngloGold (AU-N) and Meridian Gold (MNG-T) in June 2003.

The company is trading at the $0.55 per share level, midway of its one-year high of $0.98 and low of $0.21. The latest figures show 368 million shares outstanding.