Cusac is set to produce at a new gold structure

Cusac Industries says a second major structure has been scheduled for production at its Table Mountain property near Cassiar, B.C. The company says this is one of six gold-bearing veins found in 1986 by Total Erickson Resources, the project operator.

The structure was intersected in an underground drill hole which returned 13.1 ft grading 1.49 oz gold per ton and 1.3 oz silver. The vein was found 160 ft south of the producing Eileen vein where initial production began last July at 150 tons per day.

Cusac says production in the first 6-month period averaged 0.94 oz gold and the last three months was 1.18 oz. Over-all production for the period was 24,262 oz, notes Cusac, adding that these statistics are from Total Erickson.

A disagreement has surfaced over the ownership of the gold produced from the first 12,000 tons of ore milled, says Cusac. Approximately 6,700 oz of gold is in dispute, based on Erickson’s stated revenues less preproduction and production costs to Sept 31, 1986, and estimated costs of $200 per ton in the fourth quarter. Cusac argues that the $200-per-ton figure is conservative based on historic costs in the region. Cusac is confident its claim will be upheld, noting that Erickson will then be entitled to retain revenues u ntil production costs are recovered. The company predicts that all Erickson’s costs will be recovered from the first six months of production and a net profit generated. Cusac estimate 1987 revenues to be $5.4 million or $1.05 per share.

Cusac has a 40% net profits interest in the property until it has received $3 million (excluding proceeds derived from the first 12,000 tons), at which time its net profit interest will be reduced to 30%.