Glamis adopts long-term plan at Marigold

Year after year, the Marigold mine in northern Nevada more than replaces its gold reserves, yet the operation never has more than a few years of production planned out. Owners Glamis Gold (GLG-N) and Homestake Mining (HM-N) intend to change that.

The joint venture, in which Glamis has a 66.7% controlling interest, will embark on a US$1.2-million exploration program to gauge the full potential of the 30-sq.-mile property.

“With a longer-term view, we can better optimize equipment costs for the future and maybe lower operating costs,” says Glamis spokesman David Hyatt.

The heap-leach mine produced 20,280 oz. in the first quarter of 2000 at cash operating costs of US$196 per oz. — an improvement over the corresponding period of 1999.

Glamis’s share of year-end reserves stood at 12.7 million tons averaging 0.032 oz. per ton, or 408,000 oz. gold — sufficient for five years of operation.

Exploration will focus on extending the higher-grade Terry zone, to the south, and testing sections 30 and 31, farther to the south. Marigold contains unknown deep potential, though, at this point, Glamis is content to continue looking for surface oxide mineralization.

Expecting favourable results, Glamis and Homestake intend to spend a total of US$1 million in each of the next three years to increase leach-pad space at Marigold. This summer, the joint venture expects to receive approval to construct a pad southeast of the existing pads.

The company demonstrated its commitment to low-grade mineralization when, in early 1999, after acquiring the mine from Rayrock Resources, it shut the oxide mill. Rayrock had operated the mill for only a few months of the year (virtually all production at Marigold comes from run-of-mine heap leaching). However, the company may consider reopening the mill when, in the next few years, ore from the Terry zone (averaging 0.08 oz. per ton) comes on-stream.

Elsewhere in Nevada, exploration at the Dee mine in the northern Carlin trend is under way. Barrick Gold (ABX-T) is earning a 60% interest in both this property and Meridian Gold‘s (MDG-N) neighbouring Rossi property. Crews continue to carry out underground exploration from a decline started at the bottom of the Dee pit. In addition, Barrick is drilling from the surface at other targets at Dee.

Farther afield, in Honduras, Glamis expects to begin drilling at the San Martin gold mine in late summer. The program will target five geochemical zones around the existing deposits.