Carson Hill bet about to pay off for Grandview

Patience is about to pay off for Vancouver-based Grandview Resources. The company, which poured its first dore bar last December from its Carson Hill heap-leach operation in the Mother Lode area of California, is projecting a gold production of up to 72,000 oz in the July, 1987-June, 1988, period.

In the 1987 annual report, President Olaf Tolpinrud reports that the $10.5 million(US) capital cost forecast for the gold mine was exceeded by $3 million, with the increased costs attributed mainly to improvements to the start-up budget.

Grandview is forecasting an average operating cost over the projected life of the mine of $208 per ton. At current market prices for gold, and with production running at 60,000-70,000 oz annually, payback of capital costs would be achieved in two years or less.

The Carson Hill property was acquired by Grandview in 1984. While the company is mining the substantially untouched large, lower-grade, near-surface areas containing disseminated gold mineralization, considerable proven reserves remain at depth. Current proven and probable reserves stand at 10.8 million tons grading 0.05 oz gold per ton, with an additional 5.3 million tons possible.

The company hopes further drilling will supplement reserves so as to extend the life of the mine to more than 15 years. A drilling program on the property costing an estimated $400,000 is planned this year, with the money for the drilling to be drawn from profits generated by the mine.

Grandview’s first two leach pads will accommodate 1.3 million tons and 3.5 million tons of ore, respectively. Extraction rates of 70%-75% gold were indicated in metallurgical testing.

Meanwhile, the company has abandoned its Steel River property in northwestern Ontario, writing off its $54,197 investment in the property.

Grandview recorded cash and short-term investments totalling almost $3.3 million on Jan 31, the end of its last fiscal year. During the year the company raised $18.3 million(C) through a private placement and the exercise of options and warrants; it also netted an additional $4.9 million through a private placement subsequent to year-end.