U.S. REPORT Production decision for Beartrack expected from FMC by

A production decision is expected sometime later this year for the advanced Beartrack gold project in Lemhi Cty., Idaho.

FMC Gold (NYSE) has a 71% interest in the property comprised of the North and South gold deposits. The original discovery was made by Canyon Resources (NASDAQ) which retains a 15% interest. The remaining 14% is held by Canyon’s original exploration venture partners.

The deposits are near Leesburg in a historic placer mining district that is reported to have produced about 600,000 oz. gold over the past 120 years.

About $9.5 million was spent at Beartrack during 1990, in a program operated and funded by FMC Gold. This work involved intensive development drilling, feasibility engineering and permitting activities.

Last year’s detailed development drilling program is reported to have established a minable, heap-leachable reserve of 29.2 million tons with an average grade of 0.035 oz. gold per ton. It is expected that these reserves can be mined with an average strip ratio of 1.4-to-1 waste-to-ore.

A feasibility study was completed last year based on development of a 4.5-million-ton-per-year, open pit mine with heap leach processing.

Total capital costs are estimated in the range of US$60-70 million, with cash operating costs of US$220-230 per oz. gold produced. The study projects production of 90,000-130,000 oz. gold per year over a 7-year period from heap-leachable reserves.

FMC Gold is obligated to fund all of Canyon’s preproduction and production capital requirements which would be paid back out of net operating cash flow from Canyon’s interest.

The Beartrack property also has additional tonnage of sulphide mineral inventory underneath the shallow heap-leachable deposits. Based on 1989 and 1990 drill programs, preliminary sulphide reserves are reported as an additional 15.1 million tons grading an average of 0.042 oz. gold.

In its 1990 annual report, Canyon said more detailed engineering and economic analysis will be required to determine if this mineralized material can be mined and milled economically in a second-stage mine development.

Canyon also reports that more than US$2.5 million has been invested by the joint venture in environmental and engineering studies of soils, vegetation, water quality, wildlife and fisheries, and in preparation of a draft Environmental Impact Statement.

Government permit issuance for the Beartrack project is anticipated in mid-1991, and the board of FMC Gold is expected to make a mine development decision later this year. Once permits are in hand, mine construction could begin this year, with initial production scheduled for 1992.