Rea Gold making production plans for Mt. Hamilton

Although a detailed evaluation remains to be done, Rea Gold (TSE) is confident that grades and thicknesses on the N.E. Seligman deposit have been confirmed by drilling.

The deposit is part of the Mt. Hamilton project in eastern Nevada. Rea can acquire the property for US$5.2 million plus a 2.5% net smelter return capped at US$2.5 million.

Minable reserves in the Seligman and Centennial deposits are estimated at 9 million tons grading 0.052 oz. gold and 0.37 oz. silver per ton, available at a stripping ratio of about 5-to-1.

Besides confirming previous work and providing data for pit planning, the current drilling includes stepout holes to test for additional reserves. Hole 94-012, drilled on the southern extension of Centennial, intersected 65 ft. grading 0.097 oz. gold and 0.38 oz. silver.

Rea hopes to bring Mt. Hamilton into production in the fourth quarter and is currently trying to raise funds to cover the purchase price and estimated US$12-million capital cost.

Based on a 1.2-million-ton-per-year heap-leach operation, annual output is estimated at 50,000 oz. gold and 193,000 oz. silver at a cash cost of US$260 per oz. gold.