Stan West pours gold at McCabe in Arizona

First gold has been poured at Stan West Mining’s (TSE) McCabe mine, a former producer three miles west of Humboldt, Ariz.

A study by the consulting firm of Derry, Michener, Booth and Wahl indicates that given a gold price of $400(US) and a silver price of $8(US) per oz, the mine could generate annual pre-tax cash flow of $8.5 million.

That earnings estimate assumes a 500-ton-per-day operation with head grades of 0.30 oz gold and 2.0 oz silver per ton. Measured reserves currently stand at about 750,000 tons grading 0.332 oz gold and 1.730 oz silver per ton.

Stan West expects to have the mill, now operating at a rate of about 200 tons per day, running at its 500-ton-per-day design capacity by the end of the year in order to turn out about 50,000 oz gold and 140,000 oz silver annually.

The company, which first went public in 1981, controls a large land position measuring about 2×4 miles in the area. Included are a number of former producers including the Iron King mine which from 1930-68 produced five million tons grading 0.22 oz gold, 4.0 oz silver, 7% zinc, 4% lead and 0.5% copper.

In all of its property holding, Stan West holds 100% of the land with no royalties to vendors or former owners.

Attention, however, has been concentrated on the McCabe mine where a 14-ft, cement lined, circular shaft has been sunk to 1,653 ft. About 8,800 ft of lateral work has also been completed on the four underground levels. The old mine shaft is now used for ventilation.

The McCabe mine was first staked in the 1880s. Ore production ceased in 1937 and the property remained idle until Stan West took an interest in the property.