U.S. REPORT — Newmont acquires Atlas properties

Denver-based Newmont Mining (NYSE) has acquired the mining rights to two properties owned by Atlas Gold (NYSE).

They are the Grassy Mountain property in Malheur Cty., Ore., and the Musgrove Creek property in Lemhi Cty., Idaho.

In return for mining leases on the properties, Newmont will pay Atlas US$22.5 million.

Atlas retains a 5% production royalty on the properties and will receive an advance royalty payment of US$7.5 million on closing which is expected in October.

Atlas has outlined proven and probable reserves totalling 15.9 million tons grading 0.06 oz. gold and 0.16 oz. silver per ton at Grassy Mountain. Atlas completed a feasibility study on the project earlier this year, projecting annual production from the open pit project at about 100,000 oz. gold and 100,000 oz. silver at a production cost of under US$150 per oz. Capital cost of the operation, which would include a combination of heap-leaching and milling, was estimated at about US$80 million. Atlas had expected to complete permitting for the operation in 1993. Exploration is in an early stage at the Musgrove Creek property and Newmont plans to follow up previous Atlas work which indicated promising mineralization.

Gordon Parker, chairman and chief executive officer of Newmont, stated that the company has been aggressively pursuing attractive new gold properties and is pleased to acquire the Atlas interests.