U.S. REPORT Nerco revives Cripple Creek on camp’s 100th anniversary

The 100th anniversary of mining in the historic Cripple Creek district of Colorado will be marked by several of the region’s gold properties being brought back into production this year. A unit of Nerco (NYSE) announced plans to begin mining in the second half of 1991 from the Globe Hill and Ironclad deposits within the Cripple Creek mining district. The mining plans also include Nerco’s adjacent Victor mine.

The project is a partnership between a Nerco Minerals’ wholly owned subsidiary, Pikes Peak Mining, and Golden Cycle Gold (NASDAQ). Pikes Peak is the majority owner and operator, and it will have an approximate 64% interest after certain projects costs.

The Cripple Creek camp was known in the past for its underground precious metals (gold and silver) mines, with most of this mining activity taking place before the Second World War.

Nerco’s plans call for open pit mining of the Globe Hill and Ironclad gold deposits, which will be processed by heap leach techniques. These new operations would be in addition to ongoing dump leaching operations currently operating in the district, which may end by late 1991.

Plans are under way at Cripple Creek and at Nerco’s wholly owned adjacent Victor mine to begin mine development and construction in May, with production scheduled to start in August or September.

All applicable permits are already in place, and by the third quarter of this year, the Cripple Creek operations are expected to process at a rate of 1.6 million tons annually. The initial reserve grades about 0.046 oz. gold per ton.

Accelerated mine planning and metallurgical/engineering work were carried out late in 1990 and early 1991. The extensive development program in 1990 included 150,000 ft. of drilling, which Nerco estimates added about “586,000 contained oz. of gold” to known deposits in the district.

An additional 300,000 ft. of drilling and other development work is scheduled to be completed this year. The properties also have potential for underground production.

Thomas Albanese, chief operating officer of Nerco Minerals, said mining equipment such as loaders, drills and 85-ton haul trucks from the idled Candelaria silver mine in Nevada will be used at Cripple Creek. Operations at Candelaria were indefinitely suspended in late 1990 because of low silver prices.

The company plans to used existing processing facilities in the Cripple Creek district, which includes facilities for ongoing dump leaching operations. Nerco expects to build up to a total workforce of 133 operations and exploration employees.

The removal of equipment from Candelaria is not expected to affect Nerco’s ability to resume operation at its Nevada silver mine.

“Our plan has been to install a fleet of larger trucks at Candelaria, in the event of a sustained future rise in silver prices,” stated Albanese.

Nerco Minerals produced 181,100 oz. gold and 6.3 million oz. silver from its U.S. and Canadian operations in 1990. In Canada, the company owns and operates the Con gold mine in Yellowknife, N.W.T.

Since acquiring and taking over the underground operation in late 1986, Nerco carried out an expansion and modernization program at Con which enabled the mine to establish a new annual production record of 117,116 oz. gold in 1990.