Royalty sisters to build Nevada mine

Sister royalty companies Franco-Nevada Mining (FN-T) and Euro-Nevada Mining (EN-T) have approved an US$84-million development plan for the Rex-Grande gold deposit in Nevada’s Carlin trend.

The companies are equal partners in the Midas joint venture, which holds the 60-acre Rex Grande deposit and more than 25,000 acres in its vicinity.

They plan to conduct further feasibility work this year, but company officials left little doubt that the project will proceed.

“There will be incremental knowledge acquired . . . but, essentially, we’re moving forward,” says Seymour Schulich, chairman of the two companies.

The project has been renamed the Ken Snyder mine in honor of the companies’ chief geologist, who is credited with discovering the deposit.

Proven and probable minable reserves stand at 1.1 million tons grading 1.32 oz. gold (at a cutoff of 0.1 oz.) and 14.95 oz. silver per ton. More than 80% of the original resource was upgraded to the reserve category in 1996. The indicated and inferred resource totals 1.8 million tons grading 1.37 oz. gold and 17.4 oz. silver.

Two miles south of the Ken Snyder mine, at the Acme zone, a 1.1-million-oz.

gold resource has been delineated.

The development plan outlined by the Midas joint venture calls for a 500-ton-per-day plant (175,000 tons per year) based on a simple flowsheet, including crushing, grinding, gravity concentration, a staged leaching and thickening circuit, zinc precipitation and smelting. Recovery rates are forecast at 97% for gold and 95% for silver.

Engineering for the mine and mill facilities is set to begin immediately. The contract for portal and main decline development has been awarded to Dynatec and will start in April.

Current reserves, which extend from 500 to 1,500 ft. below surface, will be mined using both longhole and shrinkage stoping, followed by rockfilling.

Major equipment will include 30-ton haulage trucks, single- and double-boom development jumbos, and load-haul-dump machines. Initial stope access is scheduled for the second quarter of 1998.

The project implementation schedule denotes May 1999 as the production start date.

The proposed project facilities are not expected to disturb any public lands, so permitting should proceed smoothly, according to the companies. Nor is water expected to be an issue; the mine’s total water-pumping requirement will be about 80 gallons per minute, and water quality is excellent.

Reserves at the Ken Snyder mine extend along 2,200 ft. of a fault zone that can be traced for more than 20,000 ft. The deposit demonstrates strong continuity and remains open along strike to the north and south, and at depth.

The Midas joint venture has budgeted some US$8 million for the 1997 exploration program. This will be used to increase reserves and resources at the Ken Snyder mine, to delineate resources on the Acme zone (which remains open in all directions), and to conduct preliminary exploration drilling north of the mine.

Late in the 1996 exploration program, several holes drilled 1,000-3,000 ft.

south of the Ken Snyder mine showed potential for augmenting the joint venture’s gold resources. This zone will be the focus of exploration in the current year.

In the Acme zone, exploration crews will attempt to delineate high-grade feeder systems, while drilling on the West Limb prospect, west of Ken Snyder, will be carried out as well.