St Andrew on schedule for production at Stock Twp.

Toronto-based St Andrew Goldfield (TSE) is on schedule for a September, 1989 start-up date at the Stock Twp. gold property, near Timmins, Ont., shareholders were told at the annual meeting.

With financing in place, St Andrew will spend the next 12 months constructing a number of surface facilities including a 500-ton-per- day ball mill, cyclones and a thickener tank.

Barring any unforeseen circumstances, production should begin at the rate of about 30,000 to 35,000 oz annually at a cash operating cost of between $200-$250(US) per oz.

According to President Warren Armstrong, the only hitch in the St Andrew production drive was a delay in completion of an underwriting agreement with a European banking consortium designed to raise $22.1 million for mill construction.

The interest rate on the 7-year debenture is 5.74% annually to maturity, and the debentures are convertible into common shares at the holder’s option from Sept 5, until maturity at a price yet to be determined.

Since it acquired the Stock Twp. claims from parent Quebec Sturgeon River Mines (TSE) in 1983, St Andrew has spent about $22 million (including $14.7 million in flow- through financing) on an exploration program which has outlined five ore zones.

As a result, the 55%-owned Quebec Sturgeon subsidiary is in the enviable position of being able to tailor its production plans to prevailing gold prices. “We wanted to find out as much as we could about the property before going into production,” Armstrong told The Northern Miner.

As reported (N.M., Feb 22/88), most of the Toronto company’s exploration efforts have been directed toward the Stock Twp. property where underground workings have been developed to the fourth level at 575 ft below surface. Drifts on the first four levels have been driven into the N-2 zone which hosts published reserves of 1.5 million tons grading 0.183 oz gold per ton.

The company has also directed a significant amount of its exploration budget to drilling six miles further east at the Taylor Twp. claims. After com pleting 11,212 ft of drilling in the Shoot zone (at Taylor Twp.) where reserves stand at 1.7 million tons grading 0.13 oz, the company has extended the vertical depth of the zone by an additional 400 ft.

According to St Andrew, the estimate is based on a weighted average reserve calculation, taking a minimum width at 5 ft and a minimum grade of 0.05 oz.

While the Main Stock Twp. mine and Shoot zones are thought to contain 450,000 oz of gold, St Andrew recently increased its share of reserves at Stock Twp. by acquiring a block of 12 claims to the north east from Esso Minerals Canada.

As reported (N.M., Feb 29/88), St Andrew paid $950,000 cash for the 12 claims which include the N2, East zone located about 1,500 ft east of the mine workings.

The mill is being designed to operate at an expanded rate of 1,000 tons per day to accommodate ore from the East, Shoot and Porphyry zones which are currently being explored.

“There is no reason why we can’t be producing 100,000 oz annually from the property within five years,” said vice-president exploration Harry Michie.

Proceeds from the European financing in combination with a year-end cash position of $8.5 million has put St Andrew in a comfortable position to bring its Stock Twp. mine into production.

Due to a number of flow-through share financings, the company also retains $29 million in its treasury, Armstrong said.

The St Andrew issue was trading recently on the Toronto Stock Exchange at $3.25 in a 52-week range of $8.13 and $2.50.