Pegasus plans fifth gold mine in `88

The growth spurt continues for Pegasus Gold with plans for another new gold mine in 1988.

The Spokane-based gold producer had a banner year in 1987 with record production and record earnings. Earnings rose to $14.5 million from $4.7 million the year before. Having grown in just two years from a one-mine $40-million company to a 4-mine $200-million company, Pegasus is fast joining big league precious metal producing ranks. Its fifth mine, the Beal property near Anaconda, Mont., is scheduled to come on stream late this year.

Production of 270,000 oz gold, 1.5 million oz silver, 18 million lb lead and 46 million lb zinc is forecast for 1988.

In 1987, the company mined over 17 million tons of ore from four mines. Production totalled 228,000 oz gold, 780,000 oz silver, 14.4 million lb zinc and 8.6 million lb lead.

Pegasus has been a leader in the field of heap leaching technology and mining low grade ores since it began production at its Zortman/ Landusky mine in north-central Montana in 1979. The mine produced a record 106,000 oz gold and 202,600 oz silver in 1987, using conventional open pit, heap leaching methods. As a result of exploration and acquisitions in the area, ore reserves still stand at 37 million tons grading 0.019 oz gold per ton, even though more than 500,000 oz gold has been recovered from 39 million tons of ore mined since 1979.

The company has demonstrated further expertise at processing complex metallurgical ore at its Montana Tunnels mine near Jefferson Cty., Mont. Ore milled since start- up in March, 1987, totalled two million tons grading 0.023 oz gold, 0.52 oz silver, 0.38% lead and 0.92% zinc. The mine produced 31,800 oz gold, 529,300 oz silver, 4,300 tons lead and 7,200 tons zinc in 1987. For 1988, Montana Tunnels has forecast production increasing to 85,000 oz gold and 1,357,000 oz silver. The mine, which cost $51.5 million, has reserves of 52.5 million tons grading 0.025 oz gold, 0.496 oz silver, 0.247% lead and 0.654% zinc. At a rate of 12,500 tons of ore per day, these are sufficient for a minimum 12-year mine life. In addition, about 20 million tons of low grade material will be stockpiled during mining for processing at the end of the mine life.

Near Winnemucca, Nev., the company’s Florida Canyon mine produced 47,800 oz gold from 3,787,000 tons of ore grading 0.022 oz. The Relief Canyon mine, located about 40 miles south of Florida Canyon produced 41,600 oz gold from 2,152,000 tons of ore grading 0.029 oz.

The Beal mine will join producer ranks in the fourth quarter of this year. With mineable reserves of 11 million tons grading 0.05 oz gold, the open pit operation is scheduled to produce 38,000 oz per year.

The key to the company’s growth is its aggressive exploration and acquisition activities. Exploration around existing mine sites continues to extend the lives of these properties. In addition, the company has a total of 19 properties comprising 39,000 acres under evaluation in Nevada, Montana, Idaho and California. Seven properties were drilled during the year encompassing 120 drill holes totalling 36,000 ft.