Cliff forsees February start for placer mine

Production is scheduled to begin in February at Cliff Resources’ Olinghouse placer gold mine in Nevada, the company reports.

Cliff is forecasting a production rate of 25,000 oz gold per year; three years of proven reserves have been calculated to date. The company reports additional deposits adjacent to the present pit which are expected to extend the mine life. Operating costs are projected at $150(US) per oz. The property was mined previously by a major U.S. corporation.

Cliff reports it has negotiated a mining venture and financing agreement with an unnamed Canadian subsidiary of an Australian gold-producing company on the Olinghouse mine. The mining venture is arranging a 10,000-oz gold loan through First Toronto Capital Corp.; of these proceeds, $2.5 million will be used to improve the plant and mine, re-start production and provide working capital. As well, $1.5 million will be allocated to purchase the interests of the previous operators.

Under the terms of the financing, Cliff will receive a cash payment of $1,243,000; the two participants to the mining venture agreement will each hold a 50% interest in the mine. Cliff will act as mine operator.