A recently completed prefeasibility study on the Shafer Gold deposit in Dillon, Mont., indicates it could be brought into profitable production at a rate of 350 tons per day. TPacific Gold (VSE) can earn a 60% interest in the property from Yellow band Resources (VSE) by spending a total of $4 million on the property by October, 1993. Pacific Gold has spent about $600,000 to date.
The study outlined an open pit, minable, proven and probable reserve on the Shafer deposit of 382,500 tons grading 0.24 oz.gold and 1.0 oz. silver per ton.
The deposit dips at about 20
to the west and averages 5-8 ft. in thickness over a strike length of about 2,000 ft.
Capital cost of the project is estimated at $10.8 million including $4.9 million for preproduction stripping and $5.1 million for a mill and tailings pond.
Using estimated recoveries of 92.5% for gold and 75% for silver the mine would produce about 27,000 oz. gold and 92,000 oz.silver at an estimated cash cost per oz. of US$158.
Pacific Gold is now arranging financing for a $1-million program to include permitting and further development of the deposit.
The company mined a number of bulk samples from the deposit in 1990 and plans to complete metallurgical testing in 1991.
The 1991 program will also include further exploration work to the south and north of the deposit where a number of targets have been identified.
Pacific Gold has about 3.8 million shares outstanding.
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