In return for a US$5,000 option payment, Verdstone Resources (VSE) recently acquired the right to lease the Victorine mine about 50 miles north of Round Mountain in central Nevada.
The option is exercisable for a period of 90 days and gives the company the right to lease the property in return for a 5% net smelter return royalty and annual payments of US$25,000.
Larry Reaugh, president of Verdstone, said the company is now reviewing reserves at the former underground producer.
The mine operated from March, 1987, to August, 1989, using long-hole mining methods. Production for the period totalled 73,000 oz. gold and 150,000 oz. silver from 493,000 tons of ore grading 0.19 oz. gold for an average cash cost of about US$289 per oz.
Reserves are contained in a steeply dipping shear structure reached by a number of adits into a mountain side. Prior to beginning production in 1987, preliminary estimates put reserves at over one million tons grading 0.22 oz. gold per ton.
Outlined over a vertical extent of about 500 ft., the deposit is open in all directions and the company sees excellent potential for adding further reserves.
Reaugh said the company is planning detailed sampling on the waste dump where preliminary sampling indicates up to half the one-million-ton dump may be high enough in grade to justify milling.
The company is also negotiating a milling agreement with the owners of the 700-ton-per-day mill about three and a half miles from the mine site. Reaugh said very little development work will be required and estimated the mine could be brought back into production within 4-6 months. Verdstone has about 4.9 million shares outstanding and $25,000 in working capital. Reaugh said the company is planning to complete a private placement to raise up to $500,000 for work on the property.
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