Minerex drilling intersects Humboldt vein extension

An exploration drill program operated by Minerex Resources (TSE) has encountered the western extension of the Humboldt vein being mined at the Aurora Partnership heap leach operation in Mineral Cty., Nevada.

The success of the program prompted the company to initiate a re-evaluation of reserves to determine the economic feasibility of mining to the west and to a greater depth. The results of this re-evaluation are expected in September.

“We’re optimistic this year’s drilling will expand our reserves,” said Minerex President John Devitt.

Minerex operates and owns 50% of the Aurora Partnership property, which includes the open pit mine producing 30,000-34,000 oz. gold annually. At the end of 1990, the epithermal vein-type deposit was reported to contain open pit minable reserves of over 600,000 tons grading 0.13 oz. gold per ton within a larger geologic reserve.

This year’s 16,850-ft. frill program included both infill drilling and deep drilling below the 7,160-ft. elevation on the recently acquired Humboldt West claim group.

Minerex is currently mining at the 7,000-ft. elevation, and the ultimate pit design (without taking into account mineralization encountered in the recent drilling) will continue to the 6,860-ft. elevation. The current strip ratio is about 5-to-1 waste-to-ore, and the ore requires crushing and agglomerating before being placed on heap leach pads.

Selected results from recent drilling include: 150-ft. grading 0.075 oz. gold from 235-385 ft.; 90-ft. of 0.13 oz. gold from 230-320 ft.; 85 ft. of 0.21 oz. gold from 80-165 ft.; 40-ft. of 0.10 oz. gold from 485-525 ft.; 110-ft. of 0.076 oz. gold from 420-530 ft.; and 25-ft. of 0.19 oz. gold from 290-315 ft. The highest grade intersection was 5 ft. of 0.64 oz. gold from 545-550 ft.

All holes were drilled at an angle ranging from 45 to 55 degrees into a near-vertical structure.

Minerex’s primary focus will be the continued exploration and development of reserves at the Aurora Partnership mine. But the company is also looking for other mineral projects to provide a longer-term reserve base and opportunities for growth.

The Vancouver-based junior reported net earnings of $270,000 for its fiscal year ended Feb. 28, compared with $1.19 million for the prior year. This fiscal year’s earnings were reduced by writedowns of the carrying values of two exploration properties, and had this not been the case, net earnings would have been $1.5 million.

Revenue for the fiscal year was $15.77 million, primarily generated from sales of 33,401 oz. gold and 50,747 oz. silver. Revenues benefited from a 19% increase in gold production and from a gold price protection and hedging program which resulted in the company realizing a US$397 average price per oz. gold produced.

Cash operating costs were US$277 per oz. gold for the fiscal year, compared with US$266 in the prior year.

During the fiscal year, Minerex repaid its outstanding debt balance of $1.49 million and the company is now debt-free. Minerex is owned 50.4% by Canada Tungsten Mining, which in turn is owned 57% by Amax Inc.