NEVADA — Jerritt Canyon mine to benefit from new gold discoveries

Two discoveries and new production from the Dash open pit have invigorated operations at the 15-year-old Jerritt Canyon gold mine, near Elko.

Independence Mining, a subsidiary of Luxembourg-based Minorco (MNRCY-Q), owns a 70% interest in the project and acts as operator. Reno-based Meridian Gold (MDG-N) holds the remainder.

Plans call for both new discoveries to be mined from underground.

A decline at one of the underground deposits — the Saval-Steer Extension — has been driven to 1,250 ft., and drilling will attempt to confirm reserves.

Independence hopes to mine the deposit over five to six years.

At the other underground deposit, East Marlboro Canyon, a 2,000-ft decline is reported to be half-finished. Reserves stand at 70,000 oz. (grade and tonnage estimates unavailable).

Work on these underground deposits, the portals for which are at the bottom of mined-out pits, began last summer.

.SCoulee and Burns Basin

Recent exploration on the 125-sq.-Mile Jerritt Canyon property revealed more gold at the Coulee and Burns Basin Extension targets. The former contains a resource of 1.9 million tons grading 0.27 oz. per ton, equivalent to 500,000 contained ounces, while, at Burns Basin, pre-stripping for a small open pit is under way in preparation for a fourth-quarter startup.

At the Dash open pit, which entered production last year, Independence is ready to enter the second stage of mining. Pre-stripping for the third phase is also under way.

Reserves at Dash stand at 432,000 oz., and Minorco is evaluating the possibility of following mineralization underground.

Current production comes from the Dash open pit and the Murray underground operation. The company expects the Saval-Steer Extension, Dash and Murray to be the main sources of ore until the year 2000. Refractory ore will be processed using a dry mill and roasting circuit.

To date, Jerritt Canyon has produced 4.5 million oz., and reserves have been replaced at an average cost of US$15 per oz.

In 1996, the operation cranked out 309,000 oz. at a cash cost of US$297 per oz. Production in 1997 is expected to drop to 260,000 oz., though cash costs are expected to fall to US$225 per oz. Total reserves stand at 9.3 million tons grading 0.20 oz. gold, equivalent to 1.9 million ounces. The property includes a geologic resource of 31 million tons grading 0.19 oz.

The success of Jerritt Canyon has lured other juniors to the region. Among the most successful is Aur Resources (AUR-T), which operates the Coleman Canyon gold project, 62 miles north of Elko.

Australian miner Newcrest Resources is awaiting drill permits for its Tuscorora project, situated southwest of Jerritt Canyon. Other companies in area include Vista Gold (VGZ-T), Crown Resources (CRO-T), Atlas (AZ-N) and Romarco Minerals (R-T).