NEVADA AND THE WESTERN STATES — Globex drills to expand potential of Tonkin Springs

Having acquired the Tonkin Springs gold project in February 1997, Globex Mining Enterprises (GMX-T) is now receiving positive results from an ongoing drill program on the past-producing Nevada property.

The widely spaced program is designed to enhance the potential of a planned open pit, with the intention of upgrading previous results from the Main zone into the proven, probable and minable categories, while, at the same time, exploring several other zones.

Highlights include:

* hole 9, which returned 0.11 oz. gold per ton across 55 ft. (from 0 to 55 ft.) in the Main zone;

* hole 10, which returned 0.12 oz. gold across 45 ft. (0-45 ft.) in the Main zone;

* hole 13, which returned 0.1 oz. gold across 75 ft. (150-225 ft.) in the Lower zone;

* hole 16, which returned 0.08 oz. gold across 85 ft. (10-95 ft.) and 0.09 oz. gold across 20 ft. (275-295 ft.) in the Main zone;

* hole 26, which returned 0.07 oz. gold across 105 ft. (75-180 ft.) in the Main zone;

* hole 27, which returned 0.08 oz. gold across 100 ft. (0-100 ft.) in the Main zone; and

* hole 28, which returned 0.06 oz. gold across 100 ft. (0-100 ft.) in the Main zone.

Globex reports that hole 13 may have tapped open-pit-minable mineralization between the near-surface Main zone and the Lower zone. The mineralization in that hole correlates well with 16 other drill intersections that together define a northwesterly trending gold zone at least 700 ft. long by 100-300 ft. wide and roughly 150 to 300 ft. below surface.

Field work for the latest drill program was carried out in late 1997 under the supervision of MPH Consultants. Reverse-circulation drilling was employed to collect continuous 5-ft. chip samples.

The 33-sq.-mile property comprises 1,059 claims extending for 8 miles of strike length in the Battle Mountain-Cortez gold trend near Elko, Nev. The project is envisaged as a bio-oxidation/heap-leach operation.

Final column testing of material from the old mine site is under way, and it is expected that this process will be completed by September. The long-delayed return to production is expected to take place in the latter half of 1999. Infrastructure installed thus far has cost about US$60 million.

Drill-defined reserves and resources at Tonkin Springs are estimated at 1.4 million contained oz. gold.

Tonkin Springs was brought into production in the late 1980s. Technical and financial problems led to the suspension of operations in 1988.

Ore will be treated using bio-oxidation and heap-leach technology before being processed at an on-site, US$50-million milling complex with a carbon-in-leach (CIL) capacity of more than 1,500 tons per day.

Back in 1988, shortly after construction of the milling complex was initiated, the project encountered some difficulties, including technical problems related to the bio-oxidation process. Total plant development costs and related infrastructure costs swelled to US$56 million and created a heavy burden on the resources of then-owner U.S. Gold (USGL-Q). As a result, the Denver-based company sold a 60% interest in the project to Gold Capital.

Ultimately, however, the financial problems proved too great and the mine was closed in 1990.

Past producers are rarely forgotten and, occasionally, they get more than one chance. Tonkin Springs’ chance came in 1995, when Royalstar Resources caught wind of the project and acquired control of Gold Capital.

A new feasibility study was produced, which concluded that almost 4 million tons of oxide reserves averaging 0.33 oz. gold could be processed using cyanide heap-leaching alone. However, the almost 3 million tons of sulphide reserves averaging 0.09 oz. gold would be processed using a combination of acid bio-oxidation and heap leaching, followed by CIL processing.

The main difference between the previous operation and the one proposed in the new feasibility study lies in where the ore would be processed.

Previously, the ore was pre-oxidized in a milling environment and put through the CIL plant. The revised plan calls for the ore to be pre-oxidized in a heap environment, using an acid leach, and then put through the CIL plant. In effect, two well-established processing techniques will be used to achieve similar recoveries at a lower overall cost. Metallurgical tests conducted in early 1996 suggested gold recoveries in the order of 80 to 85%.

But before the project could get off the ground, Royalstar, in August 1997, sold its stake in Gold Capital to Globex. Only months before, Gold Capital’s 40% partner at the Tonkin Springs project, U.S. Gold, acquired a 25% interest in Gold Capital. Last August, Royalstar sold its interest to Globex, so that the project ownership became, and remains, 60% Globex and 40% U.S. Gold.

At last report, Globex (through its new subsidiary, Gold Capital) was completing the first bio-leach pad and had initiated final test work.