Construction to proceed at Tonkin Springs

Construction permits are in hand for the Tonkin Springs heap-leach gold project in central Nevada.

The project is owned 60-40 by NASDAQ-listed partners Gold Capital and U.S. Gold. (Gold Capital, in turn, is 51% owned by Vancouver-listed Royalstar Resources.)

The companies will employ heap leaching in the acid bio-oxidation pretreatment of the sulphide ore prior to milling.

Tonkin Springs was brought into production in the late 1980s; however, operations were suspended in 1990 because of technical and financial problems. A US$50-million milling complex already exists on site.

Recent drilling has expanded and confirmed several mineralized areas outside the main deposit, where high-grade mineralization was encountered in eight new drill holes.

Highlights from the program include: hole 1, which intersected 45 ft. grading 0.198 oz. gold per ton; hole 2, which cut 53 ft. grading 0.117 oz. gold; and hole 3, which hit 101 ft. averaging 0.107 oz. gold.

Lower-grade sulphide mineralization (located at a depth of 140 ft.) was extended over a 95-ft. thickness with an average grade of 0.048 oz. gold.

More drilling is planned.

Situated in the Battle Mountain Trend, the Tonkin Springs property is expected to produce 80,000 oz. gold per year. Startup is scheduled for early 1996.