Shaft sinking on hold as Barrick finds more gold

American Barrick Resources of Toronto is faced with a couple of problems which every mining company would love to have.

Recent deep drill results at its Goldstrike property near Elko, Nev., have been so encouraging that the company has had to revise plans for a possible underground mine shaft while a new site is selected.

The company will also have to come up with a name for the former Deep Post and Betze deposits which have attracted so much attention to this open pit operation. The latest round of drilling suggests that they are contained in one huge deposit.

The 2,000-ft production shaft, scheduled to be placed 1,600 ft south of any known ore, was previously designed for an operation to mine ore from both the Deep Post and Betze simultaneously.

However, Barrick says several deep drill holes have recently been completed in an unexplored area between the Post and Betze deposits.

According to recent results, the Deep Post has a possible reserve of 2.8 million tons at a grade of 0.39 oz gold per ton and an additional possible reserve of 2.7 million tons at 0.40 oz.

Barrick says the Betze deposit contains a probable reserve of 3.7 million tons at 0.22 oz and a possible reserve of 4.2 million tons at 0.21 oz. Latest results

“The latest results indicate that ore is continuous between these deposits and it extends both further north and south than was previously determined,” the company says.

They include 25 ft of grade 0.96 oz between 895 ft and 920 ft, 35 ft of 0.89 oz between 1,050 ft and 1,115 ft, 235 ft of 0.26 oz between 1,065 ft and 1,300 ft and 45 ft of 0.18 oz between 1,315 ft and 1,360 ft in a 1,500-ft hole drilled 300 ft south of a line connecting the former Post and Betze deposits.

As a result, Barrick says the area containing the known mineralization has more than doubled since the third quarter report to shareholders was issued.

It now extends over an area of approximately 4,200×800 ft containing geologically inferred reserves of more than 10 million oz gold and a significant portion is classified as proven and probable.

“We were quite skeptical that this would happen but naturally we are very excited,” said Brian Meikle, senior vice-president operations, who refused to second guess a Denver, Colo., consultant who is attempting to establish a new reserve figure. Large blanks

“We still have some large blanks to fill in but there’s no reason why they can’t be just as interesting,” he said.

With the discovery of high grade areas extending the orebody to the south, Barrick says the site previously chosen for the underground shaft is now too close to the orebody.

“We wanted to locate the shaft at least 1,600 ft from the nearest ore but the latest drill results mean we are still looking,” said Meikle.

“Shaft sinking will be delayed a few months while a new site is selected.”

Meanwhile, Meilkle says construction has started on a new 4,500-tpd oxide mill which is designed to process ore from the upper part of the Post deposit. It is scheduled to be up and running by the end of August.

Barrick will also introduce a crushing and agglomerating facility to improve the heap leach operation which was scheduled to produce 52,000 oz in 1987.

While future plans include a 5,000-tpd sulphide mill, Meikle said his company still hasn’t decided whether the Deep Post and Betze deposits will be mined from a huge open pit or underground methods. Stripping process

A costly stripping process made an underground operation look more feasible but the latest drill results have clouded the issue.

However, investors were slow respond to the latest Goldstrike news. In Toronto, Barrick added 62 cents to its share price to close at $26 in a 52-week range of $40 and $10.50 Tuesday.

Street sources blamed this apparent apathy on a slow market.

The shares of Franco-Nevada Mining which holds a 4% royalty and 5% net profit interest in the Post and Goldstrike claims climbed to $7.25 from $6.75. That compares with a 52-week high of $16.75 and $3.50.