Vancouver – Beleaguered gold producer Queenstake Resources (QRL-T, QEE-X) enjoyed some positive news with underground exploration drilling on its Mahala deposit returning further high-grade values over significant widths.
The drill program on Mahala, in its Smith Mine and part of the Jerritt Canyon mining complex in northeastern Nevada, returned intercepts of up to 12.2 metres grading 28 grams gold per tonne in the Zone 4 – Mahala Dike trend and 7.6 metres of 25 grams gold in the Mahala extension within Zone 8.
The mineralized zones are located in close proximity to the Smith mine development drift.
“The Mahala deposit, which lies above the water table at the Smith Mine, produced 24,052 ore tons at an average ore grade of 0.55 opt (19 gpt), in the fourth quarter of 2006, a higher grade than expected in the operating plan. The production results confirmed continuity of the Mahala mineralization and indicate the potential to grow the high-grade Mahala deposit,” commented Queenstake president and CEO Dorian (Dusty) Nicol.
Queenstake recently reported fourth quarter gold output of about 45,700 oz. from its Jerritt Canyon operations, including roughly 8,700 oz. from ore purchased under an agreement with Newmont Mining (NMC-T, NEM-N).
The tally gives Queenstake 2006 full year production of 169,700 oz., on par with its revised forecast.
Shares of the Denver-based gold producer have recently buoyed off a one-year low of 20.5 apiece, inching up to the 24-level. The stock traded at a 52-week high of 60 per share last May. With about 583.7-million shares outstanding, Queenstake posts a $140-million market capitalization.
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