Vancouver — Coeur d’Alene, Idaho-based
The partners will focus on the Clementine-Gwenivere vein system in the Hollister portion of the property. Hecla can earn a half-stake in this portion by spending US$21.8 million on a 2-stage development program. The first part consists of a US$10.3-million program of underground development and drilling aimed at upgrading the resources into reserves. The second, US$11.5-million stage will attempt to develop the vein systems.
“We’re pleased the project attracted one of America’s most recognized companies for efficiency in underground mining operations,” says Great Basin President Ronald Thiessen. “The project has all the ingredients for success; location, grade, management and gold.”
Based on an inferred mineral resource of 719,000 tons grading 1.29 oz. gold and 7 oz. silver per ton, the Hunter-Dickinson-led junior envisions a 5-year underground operation capable of mining 600 tons per day and treating ore at a local mill. This would result in production of 170,000 oz. gold and 920,000 oz. silver annually. Cash costs are pegged at US$114 per oz. gold-equivalent, with total costs slated at US$134 per oz. gold-equivalent.
The economic model uses 50% mining dilution and carbon-in-leach processing with recoveries of 95% for gold and 90% for silver. Underground mining costs are estimated at US$55.50 per ton, and toll-mining charges would be US$25 per ton. The capital cost for the proposed mine is projected to be US$22 million.
“We’re pleased to have this opportunity to expand our gold and silver production, especially in Nevada, where Hecla has had successful operations in the past,” says Hecla’s chief executive officer, Arthur Brown.
Hecla plans to begin engineering and permitting work right away. The company has one year after receiving the permits to complete stage-one of the program. The company then has 45 days in which to begin phase 2, which has the timetable of another year. Once a final agreement is signed, Hecla will issue 2 million warrants to Great Basin and, in return, receive 1 million warrants in the Hunter-Dickinson-led junior. Hecla will also issue 1 million warrants upon completion of each work stage, and Great Basin will match that with 500,000 of its warrants.
The Ivanhoe property lies midway between two major operations: Newmont Mining’s Ken Snyder mine and Barrick Gold’s vast Goldstrike property. Over the past couple of years, Great Basin has focused on high-grade, gold-silver veins below and adjacent to the low-grade, disseminated Hollister deposit, which was previously mined as an open pit.
The resource comprises seven veins hosted by Ordovician Valmy Formation rocks thrusted over younger carbonate rocks.
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