During 8 years of operating Pinson pays owners $100m

Despite its modest size, the open pit mining operation has distributed almost $100 million to its owners, including operator Rayrock, which has a 26.5% interest. American Barrick (TSE) and Corona Corp. (TSE) have about 26% each, and three individuals hold the remaining interest.

Rayrock began exploring Nevada’s mineral potential in the early 1970s, and its work with a variety of partners led to the discovery and development of four commercial gold deposits.

Pinson and the nearby Preble mine, about 14 miles apart on the Pinson-Getchell trend, were followed by the opening of the 29.33%-owned Dee mine in the fall of 1984. This open pit mining operation is near Elko at the northern end of the Carlin Trend.

The most recent open pit mine to be developed and operated by Rayrock is the 23.3%-owned Marigold mine near Battle Mountain which is held in a joint venture with Placer Dome (TSE) and Corona.

The Marigold mine, a $37-million(US) 1,250-ton-per-day milling and 2,000-ton-per-day heap leach operation, was opened just over a month ago, so it’s not yet contributing to Rayrock’s bottom line.

But Rayrock’s share of production at Pinson (including Preble) and Dee was 15,566 oz gold at an average cost of $202(US) in the first half of 1989, compared with 16,479 oz in 1988 at an average cost of $193(US) per oz.

During a visit to Pinson, the first mine to be developed by Rayrock in Nevada, The Northern Miner learned that recent exploration on the property expanded reserves to sustain production at current levels for another eight years.

Several pits on the property are mined out. However, the reserve increase came from the expansion of the Mag pit south extension and the nearby C, CX and Felix orebodies.

The company is mining from the Mag pit, not far from the 1,500-ton- per-day mill and office facilities on the property. The Mag pit was discovered after the mill was built, so safety procedures involve removing mill and office personnel during blasting.

At last report, mill reserves at Pinson were 4.4 million tons grading 0.090 oz gold and leach ore reserves were 2.2 million tons grading 0.029 oz. The heap leach operation processes about 2,300 tons per day.

But Rayrock also has found deeper, more refractory mineralization in the Mag pit that it expects could significantly increase mineable reserves, given favorable results from metallurgical test work. Exploration is also planned to test other favorable areas within the 30-sq-mi Pinson/Preble land package.

As Preble’s heap leach reserves are nearly mined out, it’s expected the mine will be closed shortly. However, Rayrock plans to use the existing facilities next year to begin processing reserves from Kramer Hill, six miles away.

Being at the north end of the Carlin Trend, the most active mining camp in North America, the Dee mine has a smaller land position. From a vantage point on the property it’s possible to view the huge mining operations of Newmont and American Barrick.

Rayrock’s partners at Dee are Corona and U.S. Gold (NASDAQ) (29.3% each) and John Livermore (12%). Exploration is continuing on the 12-sq-mi property. However, it’s considered to have more limited reserve potential than Pinson or Marigold. At last report mill reserves were 1.8 million tons grading 0.091 oz gold and heap leach reserves were 1.8 million tons grading 0.026 oz, sufficient for about five more years at current rates.

The Dee property has a 1,250- ton-per-day capacity mill and a 780-ton-per-day heap leach facility. The Ren property, several miles east of Dee, is a seasonal satellite heap leach operation with a production capacity of 225,000 tons per year.

Production decreased at Dee in the first half of 1989 because narrower structures were mined and because lower grade material was processed. But Rayrock expects that production rates will improve in the last half of 1989 as very little heap leach material is processed in the first quarter.

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