With Homestake Mining (NYSE) out of the picture, U.S. Gold (NASDAQ) has signed an agreement giving Cornucopia Resources (TSE) an option to acquire a 55% interest in the Tonkin Springs mine and mill in Eureka Cty., Nev.
Cornucopia can do so by paying US$5 million to U.S. Gold. An initial payment of US$500,000 is due, on exercise of the option, by June 30, 1993, with the balance (plus interest at U.S. prime) payable over four years in quarterly installments.
Homestake, which acquired 51% of the property from U.S. Gold in 1990, withdrew from the joint venture earlier this year.
Tonkin Springs first entered production in late 1989 using bioleaching as a pre-oxidation treatment for sulphide ore followed by conventional carbon-in-leach extraction. The process proved uneconomic, however, and the operation was forced to close in mid-1990.
Cornucopia’s consultants say it is feasible that a concentrate could be produced from the sulphide ores through the addition of conventional flotation cells or column cells followed by toll-roasting at another facility. The cost of the off-site roasting is estimated at US$222 per oz. Preliminary indications point to a sulphide resource of about three million tons grading 0.095 oz. gold per ton plus an oxide resource of about two million tons at 0.043 oz. gold.
The company is completing due diligence reviews including reserve studies, metallurgical tests and related feasibility work.
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