St Andrew suspends production at Nixon Fork mine

Ore production issues are behind a suspension of production at St Andrew Goldfields (SAS-T) Nixon Fork mine in Alaska.

St Andrew said that it has been running into difficulty in producing ore at the upper portion of the 3300 zone of its Crystal deposit because the geometry of the mineralized zone is much different than the reserve estimated.

The temporary suspension will give St Andrew time to continue delineation drilling in the 3000 and 3300 zones to better define the irregular geometry of the gold mineralization for improved future mining recovery and dilution, the company stated in a press release on October 10.

Jacques Perron, who began his tenure as the companys president and chief executive on October 1, was unavailable for comment.

The company started mining the Crystal Garnet mine in the fourth quarter of 2006. Initially the company estimated that the Nixon Fork property would achieve an annual production rate of 40,000 oz. gold starting in 2007. At that production rate, based on existing gold resources, the company forecast a mine life of three years.

But the project has been somewhat problematic. In August, St Andrew shut down its milling operations for about six weeks to modify its mill circuits.

Ongoing construction of its cyanide leach facility and the installation of a dry tailings disposal system will also be suspended.

St Andrews National Instrument 43-101 compliant reserve estimate demonstrates a proven reserve of 47,000 tonnes grading 34.1 grams per tonne containing 51,500 oz. gold. An additional 137,500 tonnes grading 18.6 grams per tonne containing 82,230 oz. gold is considered as probable reserves.

The resource estimate reveals a measured resource of 23,400 tonnes at an average grade of 36.8 grams per tonne of gold containing 27,700 oz. gold at a cut-off grade of 21.0 grams per tonne gold.

On the Toronto Stock Exchange, St Andrews shares slipped $0.08 apiece to close at $0.69 on a trading volume of 297,628 shares.