NEVADA — Homestake Mining adds — Ruby Hill to crown jewels — Construction under way for initial production in late ’97

Two years of exploration near Eureka Cty. in central Nevada are beginning to pay off for Homestake Mining (HM-N) as its Ruby Hill gold deposit nears production.

The US$65.4-Million Ruby Hill project is described by President Jack Thompson as the first major discovery resulting from renewed and aggressive exploration efforts.

“We expect Ruby Hill to be one of a new generation of mines that will lead to higher annual production and lower costs,” he says.

Homestake picked up the 24,800-Acre property, situated in the southernmost portion of the Battle Mountain trend, in 1993. Subsequent drilling proved up a reserve of 7.6 million tons grading 0.099 oz. gold per ton, equivalent to 755,000 oz.

Equipment is already on site, and construction of the open pit began in February, shortly after final permits were received.

.SPre-stripping under way

Pre-stripping is in progress at the West Archimedes deposit of Ruby Hill. At the same time, the company is preparing to build offices, shops and an access road.

Work on the foundations of the crushing and processing plants began in May, as did the laying of pipe. The area set aside for the leach pads was cleared at the end of April, and surface grading is under way. Construction of the leach pads should be completed by August, with gold production anticipated in the fourth quarter.

Stockpiling of ore is under way, though the main part of the West Archimedes orebody will not be accessible until August.

In its first full year of production, beginning in early 1998, the mine will yield 3,500 tons per day, from which a total of 105,000 oz. gold will be extracted.

Cash costs are estimated at US$140 per oz., with total costs coming in at around US$258 per oz. Based on current reserves, the mine has a projected life of seven years.

Exploration continues to focus on both shallow oxide and deeper sulphide mineralization. A feasibility study at East Archimedes, which represents the deeper portions of the main deposit, is expected by the end of the year.

Resources at East Archimedes stand at 9.2 million tons grading 0.067 oz., equivalent to 614,000 contained ounces.

Meanwhile, at the Agua de la Falda operation, in the Maricunga district of central Chile, gold mining has been under way since late 1996. The operation, owned 51% by Homestake and 49% by Codelco, is near the past-producing El Hueso gold mine.

The company spent US$45.4 million worldwide on exploration in 1996 — an increase of 65% over the previous year’s expenditures.

The increase reflects the company’s determination to replace aging operations, such as El Hueso, which was closed in 1995, and California’s McLaughlin mine, which is nearly depleted.