Santa Fe boosts reserves

The proven and probable gold reserves of Santa Fe Pacific (NYSE) jumped 26% during the second half of 1993.

The biggest boost was experienced at the Twin Creeks mine near Winnemucca, Nev., mainly in the refractory mill-ore category. Reserves there total 8.5 million contained ounces of gold, an increase of 2.8 million contained ounces from July, 1993.

Last summer, Santa Fe completed a coal-for-gold swap with Hanson Natural Resources. Hanson’s Chimney Creek gold mine was then combined with Santa Fe’s adjacent Rabbit Creek mine to become Twin Creeks. The mine is expected to produce about 500,000 oz. this year.

Santa Fe also increased reserves at its Lone Tree mine in northern Nevada, more than offsetting extraction in the second half of 1993. Construction of a mill is nearly complete and the additional capacity will allow more than 200,000 oz. gold to be mined this year.

(It should be noted that reserves declined, albeit slightly, at the 200,000-oz.-per-year Mesquite mine in California.)

Santa Fe’s total reserve figure is now estimated as 14.1 million oz. (proven and probable), which is 2.9 million oz. higher than six months ago. The figure represents an increase of 7.7 million oz. (or 121%) over the 6.4 million contained ounces reported at the end of 1992. An overall recovery of 80% is expected.

The major produced 611,000 oz. gold in 1993 and expects this year’s production to approach 900,000 oz. Meanwhile, exploration efforts continue in the U.S., Canada, Mexico and South America.