Rea proves up Centennial gold deposit in east Nevada

Initial results from confirmation drilling have verified the presence of gold mineralization at the Centennial deposit of the Mt. Hamilton mine in eastern Nevada.

Rea Gold (REO-T) reports that the program consisted of 27

reverse-circulation holes totalling 3,500 metres, and three large-diameter core holes totalling 335 metres.

Previously, 38,845 metres were drilled at the site, which lies in the southern end of the Battle Mountain trend, and reserves were estimated at 7 million tonnes grading 1.2 grams gold per tonne. The current program is being managed by Mineral Resources Development of San Mateo, Calif., which is preparing new resource and reserve models.

“We plan to make a production decision come May 1st,” Rea spokesman Rodney Shier tells The Northern Miner. “We’re now working on the mine plan.” The confirmation drilling is also designed to provide information on the crushing and metallurgical recovery characteristics of the Centennial ores.

Previous column leach tests yielded a gold recovery of 75%.

The company had previously announced that operations at Mt. Hamilton were under review owing to poor operating results from production in the NES pits.

Mining began in late 1994 following a mine plan that resulted in lower-Than-expected tonnage and grade, and a higher-Than-forecast stripping ratio.

For the first two months of 1997, Mt. Hamilton produced 5,755 oz. gold and 13,986 oz. silver. The production forecast this year is 25,000 oz. gold.

The company says the Centennial deposit requires some four to five months of preproduction stripping, so a mid-1997 startup would see the pit prepared for full production by 1998. The annual mining rate is forecast at 50,000 oz.