Viceroy to start gold production next summer

With major permits granted and financing arranged, Viceroy Resources expects to begin production at its Castle Mountain heap leach gold property in San Bernardino Cty., Calif., by next summer.

The $11.2-million operation will process 8,000 tons of ore per day or 100,000 oz gold annually.

Permitting approval was received in November, paving the way for mine site preparation and plant construction. Key engineering work has started, including design of crushing and ore-stacking facilities and the leach pad and containment pond. The operating system being designed will include the company- owned permanent crushing facilities, capable of achieving optimum crush size.

Exploration drilling has resumed in the Jumbo area, 1,000 ft north of the Jumbo South and Lesley Ann deposits. Results are expected to substantially increase proven reserves of 24 million tons grading 0.06 oz gold.

Exploration by Hemlo Gold Mines under the Viceroy/Hemlo joint venture agreement is proceeding. Drill targets have been identified on the 38 square miles of claims outside of Viceroy’s exclusive 10-sq-mi area, and drilling is slated to begin shortly.

Revenues for the six months ended Sept 30 totalled $343,000 to give net earnings of $222,000. Working capital stands at about $16.5 million. In addition, Hemlo will advance $10 million for production financing convertible into 595,948 common shares.