Atna primed to pour gold again at Briggs

Vancouver – It sat idle for five years but now Atna Resources (ATN-T) has breathed new life into the Briggs gold mine in Inyo county, California, and expects to produce its first gold dore in April.

Canyon Resources, now part of Atna, built the Briggs mine and operated it from 1996 to 2004. The mine was an open pit operation with recovery through heap leaching. The mine ceased production in 2004 but Canyon continued to recover gold from the heaps until 2006. All told, Briggs produced 554,000 oz. gold from 23.5 million tons of material grading 0.031 oz. gold per ton.

In March 2008 Atna and Canyon merged. Atna immediately commissioned a technical report and reserve estimate for the mine, which concluded that Briggs could be re-opened for US$13 million in capital investment. With cash costs expected to come in at US$484 per oz., the mine should produce US$3.3 million in annual net cash flow at a gold price of US$650 per oz. or US$15.6 million at a price of US$750 per oz.

Atna quickly decided to re-open the mine, this time around as a combined open pit and underground operation. And at the end of January Atna achieved that goal, announcing that mining was again underway at Briggs with gold-bearing ore being stockpiled in preparation for crushing.

Pre-stripping operations and haulage ramp construction are both underway to develop the upper levels of the open pit. The leach pad is almost finished and rehabilitation work at the crushing facility is also nearing completion. The facility should be operational by early March.

Atna is also working to complete a new ore reserve and life-of-mine plan, which it expects to release by the end of March. The company says the new report will detail a 5-year mine plan targeting 40,000 to 45,000 oz. gold production annually, with 19,000 oz. produced in 2009 during mine ramp up.

The open pit resource at Briggs currently stands at 16.2 million tonnes grading 0.66 gram gold per tonne in the measured and indicated categories, as well as 3.8 million tonnes grading 0.76 gram gold. Atna is working to add tonnage in the form of open-pittable satellite deposits within trucking distance of the mine; two such deposits already exist but the tonnage is not yet proven up according to National Instrument 43-101 standards. The more advanced satellite zone is Cecil-R, which sits 6 km north of the mine. Drilling is currently underway at Cecil-R to inform a resource estimate.

In the underground deposit at Briggs, which is also called the Goldtooth structure, measured and indicated resources stand at 313,000 tonnes grading 7.65 grams gold. Inferred resources add 2.7 million tonnes grading 2.53 grams gold. Together, the open pit and underground resources translate into proven and probable reserves totalling 4 million tonnes grading 1.16 grams gold.

Atna, following the recommendations of the Briggs technical report, plans to crush 1.45 million tonnes each year. At present plans call for three years of crushing, with leaching continuing for a fourth year, but if the satellite deposits turn out as hoped mine life would be extended.

Atna is also hoping to expand the underground resources at Goldtooth and the open-pit resources at Briggs main. To that end the company drilled 17 expansion holes and the results indicate that significant gold grades continue beyond current mine-plan limits. For example, hole 11 was drilled into the main pit area and returned numerous intercepts, including several at depth: 9 metres of 0.76 gram gold, 9 metres of 1.37 grams gold, and 10.7 metres of 0.41 gram gold. And hole 6, an underground expansion hole, cut 59 metres of 0.75 gram gold.

Briggs sits 50 miles east of the town of Ridgecrest in central California, on the side of the Panamint Mountains. Mineralization is contained in Precambrian gneiss, and in the amphibolite in particular. As explained in the 2008 technical report, structure is “critically important to ore formation” at Briggs – both mineralization and alteration are controlled by macro- and micro-scale structures, as the structures make an otherwise generally unsuitable host rock amenable to gold deposition.

The most obvious structure is the Goldtooth fault, which was a major conduit for ore-bearing fluids. The Briggs orebodies are disseminated replacement-style deposits, with a simple assemblage of gold, disseminated pyrite, carbonate, and silica.

Atna has already spent US$6.4 million at Briggs since rehabilitation work began and has committed an additional US$7.3 million. But Briggs is not Atna’s only project.

Over at the Clover project in Elko county, Nevada, Anta’s joint venture partner Yamana Gold (YRI-T, AUY-N) recently completed a 10-hole drill program. In 2007 one of Yamana’s drills hit 9.5 metres grading 9.4 grams gold; the 2008 program probed the continuation of that mineralization to the north.

The effort was successful: the Clover Hill zone now stretches another 200 metres north. Hole 9 returned some interesting intercepts: 15 metres of 0.58 gram gold and 16.5 grams silver per tonne from 231 metres depth followed by 9 metres of 2.87 grams gold and 4.8 grams silver from 250 metres downhole. Hole 12 hit a short, high-grade segment – 4.6 metres carrying 13.8 grams gold and 16.5 grams gold – and hole 14 returned 10.7 metres of 0.89 gram gold and 61 grams silver.

Yamana is working to earn a 51% interest in Clover by spending US$3.3 million on exploration and paying Atna US$635,000 before mid-2010. By completing a prefeasibility study on the project Yamana can increase its interest to 30%. The major recently told Atna that it plans to drill at Clover again in 2009 and is currently up to date with its earn-in payments.

And at its major joint-venture project, Atna’s parter Pinson Mining recently earned its 70% interest in the Pinson project by spending US$30 million on exploration. In 2008 Pinson drilled over 50 holes into Carlin-type gold system at the property, which is in north-central Nevada. According to a 2007 estimate, Pinson hosts 2.5 million measured and indicated tons grading 0.34 oz. gold per ton as well as 3.4 million inferred tons grading 0.34 oz. gold.

Finally, at its Reward gold project near Beatty, Nevada, Atna recently completed an economic feasibility study that concluded a conventional open pit mine and heap leach operation would be profitable. Atna is currently focused on permitting work at Reward. Reward hosts 5.2 million tons averaging 0.027 oz. gold as proven and probable reserves.

Atna refilled its coffers in September when it closed the US$20-million sale of a royalty portfolio, including a royalty on the development-stage, privately-owned Wolverine project in the Yukon and royalty interests on properties in the Dominican Republic and Argentina.

And in the final chapter of a long saga, Anta lost its petition to have its court case against a cyanide ban in the state of Montana heard in the Supreme Court. In 1998 the passage of the I-137 anti-cyanide ballot outlawed the use of cyanide to recover gold from ores mined by open-pit methods. When the initiative passed, the Seven-Up Pete Venture (in which Atna was a partner) had already spent over US$70 million on drilling, permitting, and engineering the McDonald gold project in Montana.

News that operations at Briggs had gotten underway lifted Atna’s share price to 80¢ from near 60¢. The company has a 52-week trading range of 30¢ to $1.59 and has 82 million shares outstanding.