River Gold mills ore from Edwards mine

Ore from the Edwards gold mine near Dubreilville, Ont. — one of the richest deposits in Canada — is being processed commercially for the first time.

Mine owner VenCan Gold (VCG-M) reports that the first mill run commenced on Aug. 27 at the nearby Magnacon mill of River Gold Mines (RIV-T). River is financing, managing and developing the Edwards mine in accordance with a lease agreement signed in March 1996. VenCan leased its Edwards property to River Gold for a non-refundable $500,000 advanced-royalty payment plus half of net operating profits.

Commencement of milling was delayed by almost two months because an access road to the Magnacon mill had to be constructed, and because River Gold decided to consolidate all 1997 production from Edwards into a single mill run of 45,000 to 50,000 tons.

As of Aug. 21, about 16,500 tons had been transported to the mill site from the Edwards mine. The material continues to be trucked at the rate of 500 tons per day.

Milling of Edwards’ ore is scheduled to last 70 days at a daily throughput rate of 700 tons. VenCan has engaged a full-time mill expert to monitor processing of the material.

Meanwhile, mine development at Edwards continues, with the ramp now advanced to the 380-vertical-foot level. Stope development from the 200-ft. level up to near surface has been completed for both the Carbonate and Porphyry zones.

The uncut, weighted average grade of all stope chip samples taken from the Carbonate and Porphyry zones stands at 1.02 oz. gold per ton across an average width of 7 ft. VenCan’s 1992 ore inventory report for the two zones listed a drill-indicated reserve (classified as probable) of 43,915 tons grading 0.964 oz. gold (uncut) — all within 200 ft. of surface.

After the initial Edwards mill run is complete, River will resume processing ore from its own Eagle River mine, which is near the mill. Last year, Eagle River yielded 64,523 oz. gold from 178,658 tons grading 0.37 oz. gold. Gold recovery was 97%.

River reports that production for the first half of 1997 was 31,700 oz. gold from 114,310 tons milled. Cash operating costs fell to US$208 per oz. in the second quarter from US$229 per oz. in the same period last year.

River Gold earned $1.7 million (or 5 cents per share) in the first half of 1997, compared with $4.6 million (13 cents per share) in the first half of last year.