Low-cost operation predicted by Antilles for Big Croppings

Based on a recent in-house feasibility study, Antilles Resources (VSE) predicts it will be able to produce gold for a cash cost of US$146 per oz. from the Big Croppings vein on its newly optioned Chichagof mine property in southeastern Alaska.

The Spokane-based junior plans to mine the vein and barge the ore to Stewart, B.C., for custom milling. Because the property has direct tidewater access, Antilles estimates capital costs will be a modest US$1.5 million, with payback in less than 12 months after production begins. In mid-July, Antilles announced an option agreement with Golden Sitka Resources (VSE) to acquire that company’s 100% owned subsidiary, Sitka Gold. The transaction will provide Antilles with a 100% leasehold interest in the Chichagof mine, a former producer, as well as a significant amount of mining equipment.

To exercise the option, the company agreed to pay US$175,000, and to pay a variable percentage of net profits (from 3-10%) from production. The Big Croppings vein, the most advanced of 14 targets identified on the property, is estimated to host 50,000 to 80,000 tons of reserves. Antilles noted that grades are difficult to predict, “because of a pronounced nugget effect”, however it expects the vein to grade more than 0.8 oz. gold per ton. Antilles President John Hite said financing to bring the project into production has already been arranged by way of a US$2.65 million debenture issue.

Both the debenture and option agreement are still subject to regulatory approval.