U.S. Precious Metals, partners open Mother Lode gold mine

The 2,500-ton-per-day heap leach mining operation is held by a joint venture involving U.S. Precious Metals (TSE), GEXA Gold Corp. (USOTC) and mining contractor, N.A. Degerstrom. When commercial production begins in mid-December, mine operator Degerstrom will have earned its 20% interes t by providing all project financing. U.S. Precious Metals and GEXA will each hold a 40% interest.

Brought into production for just under $4 million, the Mother Lode mine is slated to produce 25,000 oz gold annually at a cash cost of about $200(US) per oz. Cash flow will be distributed to Degerstrom until it has recouped $1.5 million. At this point cash flow will be distributed according to each party’s working interest.

Mineable oxide reserves are reported as 1.2 million tons averaging 0.05 oz gold per ton, sufficient for several years of production. Additional reserves of 450,000 tons averaging 0.06 oz gold were outlined in the adjacent, near-surface SNA deposit which is still open in all directions.

The overall stripping ratio is expected to average 1:1 waste-to- ore. After mining, ore is crushed and agglomerated before being loaded onto the heap leach pads.

For U.S. Precious Metals and GEXA, the mine opening is the culmination of an exploration effort in the Beatty area that began in 1984. The companies intend to continue exploring other areas of the Mother Lode property as less than 200 of its 6,800 acres has been explored to date.

“Exploration will be ongoing in order to keep two or three years of reserves ahead of us,” said Wayne Spring, president of Vancouver- based U.S. Precious Metals. Spring noted that the property also contains a sulphide reserve that remains to be fully evaluated.

The joint venture also controls a large 19,000-acre land package covering seven separate exploration targets. According to Spring, these holdings represent the second largest land position in the Beatty area which recently became an active Nevada mining camp. Bond International Gold’s new Bullfrog gold mine (more than 200,000 oz per year), the Gold Bar mine and the Sterling mine are all within 10 miles of the Mother Lode mine.

With $1 million from the cash sale of the Hilltop property to Placer Dome earlier this year, U.S. Precious Metals is seeking additional precious metals property acquisitions.

Earlier this year, the company strengthened its management team on the technical side by appointing Ross Glanville and Jack Jefferson as directors. At the same time Spring replaced David Reesor as president.

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