NEVADA — Alta prepares to mine Olinghouse and Griffon — Green Hill-Payback pit readied for startup

Henderson-based Alta Gold (ALTA-Q) has increased its land position around its Olinghouse property in northwestern Nevada by more than half.

The company staked another 140 mining claims in an area northeast of the main deposit, which had previously been withdrawn by the federal government.

The additional claims increase the acreage at Olinghouse to 6,700 from 4,300 acres. The company now controls a mineralized trend measuring 5 miles by 1 mile in the Olinghouse district, about 35 miles east of Reno, and has already defined 10 gold targets on the new land position.

The company intends to carry out a 300-hole reverse-Circulation drill program spanning 125,000 ft. and is currently awaiting permits for an open-pit mine.

Alta picked up the property in 1994 from Phelps Dodge and, by the end of 1996, had developed minable reserves of 662,200 oz. gold (22.8 million tons grading 0.029 oz. per ton). The reserves were verified by an independent audit in March of this year.

A plan of operation was submitted in March 1996, and a draft environmental impact statement is expected in the current second quarter. The feasibility study is due in the next few months.

Startup is projected for July or August at the Green Hill-Payback pit, for which a daily mining rate of 8,500 tons is planned. Initially, higher-grade material will be processed through a 500-Ton-per-day gravity circuit, agglomerated and sent to a leach pad. Lower-grade material will be sent directly to the pads. The estimated gold recovery is 83%.

Gold occurs in a series of at least 10 sub-parallel structures cutting andesitic rocks. Several of these structures contain significant high-grade values, including previously released intervals of 64 ft. grading 1.97 oz.

gold per ton from hole C-908 and 165 ft. grading 0.68 oz. from hole OH-250.

The company hopes to produce 120,000 oz. gold annually at a cash cost under US$200 per oz.

Development and equipment costs are pegged at US$17.5 million, with working capital requirements estimated at US$2.1 million. The company will spend US$1.4 million on permitting and holding costs in 1997.

.SGriffon mine

Meanwhile, Alta has received an approved plan of operations for the Griffon gold deposit from the U.S. Forest Service. Construction and further drilling will begin in mid-June following a public review period.

A small operation 46 miles southwest of Ely, the Griffon contains minable reserves of 68,000 oz. gold contained within 2.7 million tons grading 0.025 oz. gold per ton.

The stripping ratio is 0.56-To-1, and reserves are found in limestones within two deposits: Discovery Ridge and Hammer Ridge.

The open-pit operation is expected to make use of equipment from the company’s Easy Junior mine, which is now in reclamation.

Ore will be mined, crushed and sent directly to the leach pad. The leach solution will produce gold on site, with a projected recovery rate of 85%.

The company envisions a mine life of just two years, and average cash costs are not expected to exceed US$200 per oz.

Development and equipment costs for 1997 are anticipated to be US$4.6 million, plus an additional US$1.3 million in working capital.

Construction can begin after a public review period, which will conclude in mid-June. Cash flow from the project is expected as early as the fourth quarter.

Exploration for the current year is budgeted at US$400,000. The company hopes to add to the existing reserves by drilling 100 reverse-Circulation holes (totalling 22,000 ft.). The drilling will focus on open-ended mineralization around the Hammer Ridge and Discovery deposits.