Coxheath plans Tangier production

Another gold property in Halifax Cty., N.S. will likely start pouring gold at a commercial rate July 1, 1988.

Toronto-listed Coxheath Gold Holdings announced at its annual meeting in Halifax this week that it plans to pour 9,700 oz of the yellow metal from its Tangier property by Sept 30, the company’s fiscal year-end.

At today’s gold prices, the company expects to net $1.96 million, or 8.5 cents per share by the end of fiscal 1988.

In the next full year of operation, at a rate of 250 tons per day for three quarters and 500 tons per day for the fourth quarter, Coxheath plans to produce 35,800 oz from the Tangier mine.

Projected earnings figures for that period total $8.26 million, or 36 cents per share, according to the company. Located 85 km northeast of Halifax in classical Meguma terrain, the Tangier deposit has about 235,000 tons of proven ore, grading 0.301 oz gold per ton in three parallel vein structures and 315,000 tons of probable reserves at the same grade, all to a depth of 600 ft. Possible reserves total 1.35 million tons at an indicated grade of 0.276 oz and the structure that hosts the gold-bearing zones is open along strike and to depth.

The property has been the focus of Coxheath’s efforts for the last two years. In 1987 it gobbled up 90% of the company’s $8.2-million exploration budget.

Coxheath holds 13 other properties in the province including an 18-claim block of ground adjacent to Seabright Resources Inc.’s Beaverdam mine; a small copper deposit on Cape Breton Island; a 60%- owned property at Mile Lake, 2.5 km west of Seabright’s Forest Hill mine; and a 123-claim, former gold producer near Bridgewater, N.S., known as the Leipsigate property.

Gold in the Tangier deposit occurs as free gold in association with quartz veining in a tightly folded sequence of metamorphosed sediments. Indications are about 85% of the gold can be recovered using simple gravity milling methods. But the company intends to increase recoveries to 90% within the first six months of production, presumably with the addition of a flotation step.

The orebody has been developed by a total of 3,000 m of underground workings, which include 1,500 m of declines and 1,500 m of drifting and raising. All openings were driven in 1987.

Coxheath is now constructing a tailings facility and an Environmental Assessment Impact Study has been initiated.

Final comfirmation of the production decision is expected in late May when the results of a bulk sampling program, now under way, are expected to come in.

Coxheath is in the enviable position of having sufficient working capital to complete its programs through to production. This means the company will become a gold producer without incurring any long or short term debt.

The company’s shares traded in Toronto this week at about $1.29.