U.S.REPORT Battle Mountain ups reserves at Crown Jewel

The ongoing drilling program at the Crown Jewel property in northeastern Washington has increased reserves to 1.2 million contained oz. gold from the previously reported 830,000 oz. Battle Mountain Gold (NYSE) can earn a 51% interest in the property from Crown Resources (VSE) by bringing the property into production at a minimum rate of 3,000 tons per day.

In addition to conducting an extensive drilling program, Battle Mountain recently met the deadline for the second cash payment of US$5 million as stipulated in the option agreement.

The new reserve figure includes a proven and probable open pit reserve of 5.57 million tons grading 0.13 oz. gold per ton, plus a preliminary reserve estimate of 1.71 million tons grading 0.28 oz. gold. Total reserves are stated at 7.28 million tons grading 0.16 oz. gold.

The increase in the average grade of the deposit makes up for the drop in tonnage from the previously reported 8.3 million tons grading 0.10 oz. gold.

Louis Lepry, spokesman for Crown, said none of the assays had been cut, noting statistical work indicated it was not necessary.

The open pit reserve primarily covers the area of initial drilling done in 1989 and infill drilled on 50-ft. spacings in 1990. The preliminary reserve estimate represents drilling done in the southwest Extension zone which was discovered in stepout drilling during 1990.

Although the two reserves areas are believed to be part of the same deposit, the mineralization in the Extension zone is much less complicated. The zone is essentially flat-lying, 1,000 ft. long over its east-west extent, and about 400 ft. wide in the north-south direction. The zone averages 35 ft. in thickness and remains essentially open to the west and to the south. Since the zone lies at depths of up to 400 ft., the majority would have to be mined by underground methods.

The metallurgy in the main deposit area is relatively simple with the gold essentially free, occurring on grain boundaries. Lepry said the Extension zone is believed to have similar characteristics throughout.

Lepry expects Battle Mountain to continue drilling off the deposit, including infill and stepout drilling on the Extension zone.