Placer Dome green lights Getchell

Vancouver — Placer Dome (PDG-T) is gearing up to commence operations at the Turquoise Ridge gold mine in Nevada, part of the Getchell property.

The mine is expected to operate at a milling rate of 1,100 tonnes per day, producing 300,000 oz. of gold per year 18 months after the start of development, which is scheduled this May. Over the current nine-year mine life, cash and total costs are forecast at US$215 per oz. and US$265 per oz. respectively.

“We’re very excited about the results we achieved from the test mining and contractor work undertaken last year," said Jay Taylor, President and CEO of Placer Dome. "We’ve changed the mining method and have opened up previously undeveloped high-grade areas. We know we can mine this property safely and profitably.”

Placer picked up the Getchell project in 1999 in a $1.1 billion merger with Denver-based Getchell Gold. Some two months after the deal was complete, Placer stopped production at problem-plagued Turquoise Ridge, one of two underground gold mines on the property, in order to focus on exploration and development in an effort to improve the mine’s economics. Underground operations continued through to February 2000 at the Getchell mine, with ore stockpiled for later processing.

In late 2001 Placer took a US$292 million writedown on the project after extensive analysis failed to identify a mine plan that would recover the carrying value of the asset. Placer stated that geology and poor ground conditions required a highly selective mining method that limited production to 1,500-to-2,500 tonnes per day.

Last year a program was initiated to evaluate the high grade resources in the North zone of the Turquoise Ridge deposit. The program included 600 metres of drifting and 33,000 metres of diamond drilling. Success in this area prompted Placer to consider putting Getchell back into production.

Proven and probable mineral reserves at Turquoise Ridge based on a US$300 per oz. gold price currently stand at 3.5 million tonnes grading 23.9 grams gold per tonne, or 2.7 million contained ounces. Placer expects to convert additional known mineralization into reserves within the next 30 months.

Capital costs required to ramp up to full production is pegged at US$80 million. This includes; US$41 million for underground development, US$26 million to refurbish the existing mill and US$14 million for surface work and initial operating costs. Placer Dome states that it is negotiating alternative processing arrangements that may eliminate the costs of refurbishing the mill.

The major is currently producing gold from the Getchell portion of the property under an existing processing agreement with Newmont Mining’s (NEM-N) Twin Creeks mine. According to the agreement, Newmont receives a credit for its processing cost of Getchell ore, plus a fee. The deal was inked in October of 2001 and is good for 30 months (until June 2004), or until 1 million tons of ore is sold.

Ore from the development of the new Turquoise Ridge operation produced prior to June 2004 will also be processed under the existing agreement with Newmont. Turquoise Ridge, including the Getchell underground, contributed 89,000 ounces of gold to Placer Dome’s account in 2003. The mine is expected to achieve a sustained production rate of approximately 300,000 ounces annually in 2004.

Geologically, the Turquoise Ridge deposit is hosted by hornfelsed mudstone, limestones, calcareous mudstones and some pillow basalts. Mineralization is generally located at the intersection of north-south, northeast and northwest trending faults. The North zone, is hosted within interbedded, carbonaceous mudstones and limestones and calcareous mudstone breccias. Gold distribution is related to low-angle structural zones, and intersecting, high-angle north-south and northeast trending faults. Placer Dome states that anticlines trending to the northwest and the northeast play a significant role in localizing the gold mineralization.

The Getchell deposit is hosted within the Getchell fault and footwall of the fault. Placer states that the footwall ore bodies are located at the intersections of northeast, north-south and northwest trending faults and are hosted in carbonaceous limestone, silty limestone and calcareous mudstone breccias.

Gold mineralization is associated with arsenic, mercury, and to a lesser extent antimony as well as pervasive decalcification, silicification and carbonaceous alteration.