Cliff Resources will acquire the Olinghouse gold mine northeast of Reno, Nev., the Toronto based company announced recently.
According to Chairman Gary Last, the open pit mine will resume operations in December after modifications to both the mining method and mill are completed.
Cliff Resources projects production totalling 16,000 oz of gold in 1988, nearly double the mine’s current output.
This will be achieved at a projected operating cost of $150(US) per oz of gold produced.
The property produces from drill proven reserves of 5 million tons of ore. In addition, there are one million tons of drill indicated lode material producing 0.045 oz gold per ton. More exploration drilling of lode claims is planned for l988.
Cliff Resources will invest $2 million to equip the property for more efficient production. The new mine plan provides for selective open pit development to enhance mill head grade.
The Olinghouse Joint Venture has agreed to sell the mine and mine properties for $1.5 million plus a net profits interest over the first two years of approximately $1 million depending on actual mine results.
Cliff Resources projects repayment of the total purchase and capital improvement investment of $3.5 million in the first two years of operation.
Mine operations also provide for a net cash profit to Cliff of $6 million over the same period. Future development of the 113 claim property is expected to continue the company’s Olinghouse revenues for many years.
The acquisition agreement is subject to regulatory authority and approval.
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