USMX in production at Yankee

After a year of permitting, engineering and construction, USMX (NASDAQ) recently brought a third producing property into production on the Alligator Ridge trend near Ely, Nev.

The project, dubbed the Yankee mine, has minable reserves totalling about 2 million tons grading 0.045 oz. gold per ton.

USMX completed the project within its US$4-million budget which includes leach pad capacity for the entire minable reserve.

The open pit heap leach operation has a crushing and stacking capacity of 50,000 tons per month, with leach solutions treated on site in a 500-gallon-per-minute processing circuit. Loaded carbon from the plant is processed at the company’s nearby Alligator Ridge refinery where the first gold from the Yankee mine was poured on June 24.

Mining is contracted out to D.H. Blattner & Sons while USMX conducts crushing, pad loading and recovery operations.

With an estimated recovery of about 75%, USMX expects to produce about 15,000 oz. gold from the Yankee this year, increasing to about 21,000 oz. per year over the subsequent three years.

USMX expects to produce a total of 50,000 oz. from the Alligator Ridge area this year.

For the first quarter ended March 31, USMX reported a loss of US$146,000 on sales of US$2.7 million compared with net earnings of US$338,000 on sales of US$3.6 million in the first quarter of 1991.

The company reported a cash flow deficit of US$1.3 million, significantly higher than the deficit of US$339,000 recorded for same period last year.

USMX noted that the deterioration was the result of a buildup of stockpile and work in process inventories at the Yankee during startup, as well as an interruption of gold production at the Alligator Ridge refinery.

The company completed a modernization program at the refinery at the end of the quarter, and with the new Yankee operation reportedly running smoothly, the company expects positive cash flows over the remainder of the year.