Viceroy hits new zone while mining about to start up

A new zone of high-grade gold mineralization was intersected by recent drilling on the Castle Mountain project 65 miles south of Las Vegas, Nev., in San Bernardino Cty., Calif.

Viceroy Resources (TSE) and 25% partner MK Gold, a contract miner, are gearing up to start production at their newly constructed 8,000-ton-per-day heap leach facility.

The drilling is part of a US$1.8-million program designed to look for new discoveries outside the known reserve area. The work represents the first exploration drilling in some time, since most of the companies’ resources have been concentrated on permitting and bringing the project into production. Hole 718, the discovery hole, intersected 770 ft. from 375 ft. to 1,145 ft. grading 0.099 oz. gold per ton. The intersection included a 70-ft. interval from 375 ft. to 445 ft. grading 0.25 oz. gold and a further 10-ft. interval from 525 ft. grading 1.38 oz. gold.

Hole 741, drilled about 100 ft. north of the discovery hole, encountered 495 ft. grading 0.51 oz. gold from 505 ft. to 1,000 ft. The intersection includes a 35-ft. section grading 4.76 oz. gold from 610 ft. to 645 ft. The 105 ft. above the high-grade section averaged 0.12 oz. gold while the 355 ft. below the section averaged 0.20 oz. gold and was still in mineralization at touch-down.

Hole 740, drilled about 100 ft. south of the discovery hole, intersected 490 ft. grading 0.041 oz. gold from 500 ft. to 990 ft. The hole is reported to be consistently mineralized throughout with no high-grade sections. The new zone is about 3,500 ft. southeast of the Lesley Ann deposit and is described as an elongated structure hosted in andesitic rock with strong silica flooding and stockwork veining. The zone appears to be vertical, striking in a north-south direction and is of indeterminate width. A hole drilled 100 ft. to the east of the discovery hole failed to intersect any significant mineralization while hole 621, drilled 100 ft. to the west of hole 718, intersected several lower-grade intervals.

Hole 621 encountered 30 ft. from 450 ft. to 480 ft. grading 0.057 oz. gold, 40 ft. from 500 ft. to 540 ft. grading 0.032 oz. gold, 30 ft. from 720 ft. to 750 ft. grading 0.039 oz. gold and 50 ft. from 750 ft. to 800 ft. grading 0.020 oz. gold.

Assays on holes drilled 100 ft. east and west of hole 741 are pending. Drilling on the new zone is continuing both along strike as well as to the east and west in order to determine the width of the zone.

Gordon Fitzpatrick, a spokesman for Viceroy, said the company also expects to start drilling shortly in the Hart Tunnel area in an effort to expand reserves there.

Drilling in 1991 on the Hart Tunnel zone, adjacent and to the south of the Oro Belle deposit, returned a number of good intersections including a recent hole grading 0.093 oz. gold over 290 ft. from 300 ft. to 590 ft. plus a second interval grading 0.18 oz. gold over 35 ft. from 630 ft. A new reserve estimate for the Hart Tunnel zone has not been completed, although preliminary estimates early in 1991 put reserves at about 3.4 million tons grading 0.055 oz. gold.

Fitzpatrick said commissioning of the Castle Mountain project should start shortly with crushing operations beginning in 1-2 weeks.

Proven and probable reserves at Castle Mountain were last reported at 24.6 million tons grading 0.047 oz. gold plus an additional possible reserve of 13.5 million tons grading 0.046 oz. gold.

The mine is expected to produce about 100,000 oz. gold per year at a cash operating cost projected at US$180-212 per oz.