Santa Fe plans higher output from Nevada mines

Albuquerque-based Santa Fe Pacific Gold (GLD-N) posted a profit in the third quarter and expects to do so again in the fourth.

The third-quarter profit amounts to US$3.5 million (or 3 cents per share) on revenue of US$77.4 million, compared with US$8.7 million (7 cents per share) on US$88 million for the same period in 1995.

Santa Fe produced 204,708 oz. gold during the quarter, compared with 198,514 oz. for the same period last year. This year’s production to date is down slightly from a year ago; it stands at 594,452 oz.

Despite this quarter’s earnings, the company is focusing its attention on the next quarter, when additional production is expected from several new sources, all of them in Nevada. New production will come from the Sage mill at the Twin Creeks complex, Section 14 at the Lone Tree gold mine, and Trenton Canyon.

By the fourth quarter, Santa Fe expects to be producing at a rate equal to 1 million oz. per year. This increased output is expected to continue into 1997 with the addition of production from Mule Canyon, the processing of sulphide ore from Twin Creeks, flotation from Lone Tree, and the Rosebud joint venture.

The first phase of the sulphide expansion project, which includes the Sage mill, is nearing completion at the Twin Creeks complex northeast of Winnemucca, Nev. The oxide circuit of the Sage mill is scheduled for startup in the fourth quarter.

Santa Fe has begun loading ore onto the heaps at the Trenton Canyon project, 11 miles south of the Lone Tree mine. The operation, a satellite of the Lone Tree, is mining material from the North Peak deposit at a rate of 30,000 tons per day.

The company has also completed 140 drill holes at Trenton Canyon to define and extend certain areas of mineralization. In addition, the company is investigating two new targets. One is near the town of Valmy and the second, called the Hollywood zone, has been tested by seven drill holes that intercepted a high-angle zone of near-surface oxide grading between 0.03 and 0.13 oz. gold per ton.

Santa Fe was recently granted approval from the U.S. Bureau of Land Management to mine oxide reserves from Section 14, which is adjacent to the Lone Tree’s main pit. The company now expects gold production there to increase by about 10,000 oz. for the quarter.