NEVADA — Mineral Ridge poised to enter production

Cornucopia Resources (CNP-T) will soon pour the first gold from its wholly owned Mineral Ridge mine, near the town of Silver Peak in Esmeralda Cty.

The 2,685-Acre property comprises 173 claims and includes the Mary-Drinkwater mine, a former producer.

Since first acquiring an interest in the open-pit, heap-leach mine in 1993, the company has spent US$25.4 million in capital costs, which were funded by equity financing and about US$15 million in loans.

At the Gold Wedge pits, 204,000 tons grading 0.097 oz. gold per ton have been mined and stockpiled for early processing. Meanwhile, the company has been pre-stripping the upper benches of the Drinkwater pit and building haulage roads.

Over a projected mine life of 51/2 years, Mineral Ridge is expected to product about 50,000 oz. gold annually at a cash cost of about US$235 per oz.

“It’s on the smallish side for Nevada, but it will kick out a decent cash flow,” says James Currie, vice-president of mining for the Vancouver-based company.

Gold has been mined at the property intermittently, mostly by near-surface methods, since 1863. Historical production is estimated at 576,000 oz. gold from about 3 million tons of ore, almost all of which occurred prior to 1942.

But a mining revival has been under way in recent years, aided by the Nevada government’s efforts to encourage diversification in a state economy heavily dependant on the gaming industry.

“The geology is what has brought people to Nevada, and the mining infrastructure has evolved considerably,” says Currie. “There’s also the benefit of an experienced labor force.”

Over the past four years, Cornucopia has spent US$4.1 million on exploration, development and environmental baseline studies at Mineral Ridge.

Proven and probable reserves are pegged at 5.2 million tons grading 0.068 oz.

gold, with a stripping ratio of 4.32-To-1.

Reserves have been identified in four areas: Drinkwater, with 3 million tons grading 0.06 oz. gold and a stripping ratio of 4.2-To-1; Mary, with 1.1 million tons grading 0.08 oz. and a ratio of 7.4-To-1; Gold Wedge, with 345,000 tons of 0.08 oz. and a ratio of 2.8-To-1; and Gordon-Brodie, with 191,000 tons grading 0.07 oz. and a ratio of 3.9-To-1.

There is also a low-grade stockpile of 570,000 tons grading 0.05 oz. gold.

Crushing will be carried out in four stages, to be followed by agglomeration.

The ore will be placed on a permanent pad and subjected to conventional cyanide and carbon adsorption methods.

Column leach tests indicate a gold recovery rate of about 80% over a leach cycle of 120 days.

“We are stacking materials on the heap-leach pad as we speak,” says Currie.

“At present, about 200,000 tons of material are sitting there.”

.SLow-Angle shears

Gold mineralization is localized within stacked, low-Angle shears in Proterozoic-Aged meta-sedimentary rock. The shears are sub-parallel to an underlying granodioritic intrusive and a sheeted dyke complex.

The metasediments above the intrusive complex consist of calcareous phyllite and thinly laminated and silicified limestone, with quartz-Calcite augen.

Gold occurs as electrum and native gold. Also present are some galena, sphalerite and minor arsenopyrite, pyrite and molybdenite. Hematite and goethite commonly replace the pyrite within the shears.

About 100 people are working on the site, half of whom are employed by Cornucopia; the remainder by a local mining contractor.

While gold prices have taken a beating recently, Cornucopia believes the 120,000 oz. it sold forward will protect it. The company also intends to accelerate production.

“To make up for the low gold prices, we’re probably going to have to operate over the 2,700 tons per day indicated in the feasibility study,” says Currie.

“We have the ability to do 228 tons per hour.”

Mineral Ridge will be the first mine solely operated by the Vancouver-based company. Cornucopia also has a 25% interest in the Ivanhoe project, situated in the Carlin trend. The remainder is held by Newmont Exploration, a wholly owned subsidiary of Newmont Gold (NGC-N).

Mining at Ivanhoe’s Hollister deposit ceased in May 1992, and residual leaching of the heap continued to June 1996, when reclamation began.

Cornucopia is in negotiations with a prospective new partner to replace Newmont, which decided in 1995 to withdraw its participation in the venture.

However, Newmont retains responsibility for closure and reclamation of previous operations.

Reserves at Ivanhoe stand at 42 million tons grading 0.03 oz. gold, which Currie says are not economic at current prices.

Between 4,000 and 4,500 ft. of deep drilling will be carried out this year.