Brohm Resources of Vancouver has decided to begin construction immediately on a Phase 1 heap leach production facility at its Gilt Edge mine in Deadwood, South Dakota.
After the heap leaching production facility is complete, the company will progress to a 2nd phase oxide heap leach and conventional plant to treat sulphide ores at the mine.
According to President Wayne McClay, Phase 1 will involve the mining and processing of 3.7 million tons at grade 0.048 oz gold per ton at a strip ratio of 2.1:1. Operating costs are projected at $180(US) per oz and capital costs at $11.7 million.
Further feasibility, drilling and permitting will continue on the balance of 21.9 million tons of 0.038 oz proven, probable mineable reserves which are expected to increase by further infill and exploratory drilling.
The Phase 2 feasibility study will target an average production rate of over 135,000 oz per year. Production from Phase 1 is projected at 126,500 oz over a 33-month period starting in June, 1988, and will continue with production from the oxide-sulphide Phase 2.
After paying Kerr Addison Mines (Kerr owns 51% of Blackdome Mining) $10.8 million for shares in Mining Finance Corp., Brohm has $8 million in cash.
While Mr McClay claims a merger is not in his company’s plans, Brohm is currently attempting to increase its interest in mfc from 32% to over 50%.
Brohm is also proceeding with plans to pursue a public financing to coincide with a Toronto Stock Exchange listing.
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