Glamis boosts underground reserves at Dee

Thanks to a US$3.4-million development program, Glamis Gold (GLG-N) has increased minable reserves at the Dee underground project in Nevada’s Carlin trend.

Underground drilling into the first zone has defined three separate blocks of mineralization, nearly tripling the tonnage outlined from surface drilling.

The new drilling blocked out 73,500 tons of oxide gold mineralization averaging 0.18 oz. gold and 1.5 oz. silver per ton (equivalent to 13,000 oz. gold and 110,000 oz. silver), representing a reserve increase of 173%. Mineralization in the zone remains open to the south.

Glamis is pleased with the results of this first phase of underground drilling, says company spokesman Charles Jeannes. Zone 1 was the first of as many as 12 zones to be drilled from underground.

Meanwhile, the company has drilled 28 reverse-circulation angle holes (totalling 4,730 ft.) in the first four zones of the North underground project.

Near the surface, in Zone 1, drilling encountered 35 ft. grading 0.23 oz. per ton, and 45 ft. grading 0.19 oz. Beneath the pit’s northern wall, in Zone 3, Glamis intercepted 30 ft. grading 0.33 oz. gold and 40 ft. of 0.23 oz. Drilling in Zone 4 hit 60 ft. of 0.66 oz. per ton.

On a mineralized structure west of Zone 3, the company intersected 155 ft. averaging 0.19 oz. per ton, including 70 ft. of 0.26 oz. per ton. The mineralization is outside the area that is planned for development, and Glamis plans to follow up this discovery with more drilling.

Results from surface drilling have not been incorporated into the reserve calculation. At the end of last year, Glamis had an estimated 274,900 contained ounces at Dee, of which the underground portion totalled 155,000 oz. in 720,900 tons grading 0.21 oz. gold, and the open-pit portion, 119,900 oz. in 1 million tons grading 0.11 oz. gold.

Production for 1999 at Dee, both underground and open-pit, is expected to total 58,000 oz. The company expects to complete mining in the DX pit by the end of the year.

Underground mining began on a limited scale last month. Provided ground conditions persist, Glamis will use low-cost open stoping with minimal backfilling to produce gold at under US$200 per oz.

Mine contractor American Mine Services recently completed nearly 500 ft. of drifting, including a steel portal at the bottom of the Dee pit, muck bays, drill stations, and an undercut drift into Zone 1 East.

Meanwhile, Barrick Gold (ABX-T) is constructing an exploration decline 150 ft. south of Glamis’s portal. The major can earn a 60% interest in the Dee property, excluding known mineralization, by spending US$6.5 million. The spiral decline will also provide access to the Storm deposit, north of the Dee property, where Barrick has entered into a development agreement with Meridian Gold (MGD-N).

In Honduras, Glamis expects to make a production decision at the San Martin gold project. A final feasibility study will be presented to the board of directors by the end of the summer. The company expects to produce 60,000 oz. annually at the open-pit operation, 65 miles northwest of Tegucigalpa. Cash costs should be below US$150 per oz. Overall, the company anticipates production of 200,000 oz. in 1999 from five gold mines at an average cash operating cost of US$200 per oz.