As manager and 60%-owner of the Cortez joint venture, Placer Dome (TSE) is seeking state and federal permits to build a 4,600-ton-per-day mine and metallurgical plant at the Pipeline gold deposit in Nevada.
Capital costs, including pre-stripping and contingencies, are estimated to be US$250 million.
Proposed is an open pit which would produce 3.7 million oz. gold over 12 years at a projected cash cost of US$111 per oz. including royalties. It would be Placer Dome’s lowest-cost gold mine.
The company is delaying detailed design of mine facilities pending the outcome of an issue related to a lawsuit initiated by Denver-based Gold Fields Mining. The issue is being litigated separately from other issues and relates to a 1991 exploration and purchase option agreement between the two companies affecting 40% of the deposit. The outcome will determine whether Gold Fields has the right to elect to rescind the agreement under which Placer has the right to acquire title to 399 claims within and near the Pipeline deposit. Placer Dome asserts that Gold Fields must provide it title to all the claims, regardless of the outcome of any of the disputes. Pre-stripping and construction, which are estimated to last 15 months, will not begin until the issue is resolved and operating permits are in-hand. In the meantime, the joint venture is continuing to explore several other targets in the same area.
An estimated US$6 million will be spent to explore further the nearby South Pipeline deposit which already has a drill-indicated resource of more than two million oz. gold.
This program will include 140,000 ft. of expansion and in-fill drilling, with as many as eight rigs operating at a time. Two drill holes half a mile south of the recognized deposit area have encountered “significant” gold mineralization, Placer Dome President John Willson recently told a group of mine analysts.
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