First gold is poured at Black Swan mine

Gold has been poured at Black Swan Gold Mines’ Gabanintha project in Western Australia. The $12-million(A) development is expected to produce about 40,000 oz gold per year, 25% of which will go to Black Swan.

The mine is located 480 miles north of Perth near the regional centre of Meekatharra. The joint venture’s land position covers 250 sq km of ground along a favorable north-south geological trend and reserves are increasing by about 100,000 tons per month, says President Arthur Fisher.

Projected output is based on a milling rate of 1,000 tons per day although plant capacity is actually around 1,800 tons. Limiting higher throughput at present is the availability of ore. Also, the strip ratio is currently 12:1 but it should average half that over mine life, he predicts.

Surface oxidation reaches to 150 ft in depth and very little blasting is required, which reduces mining costs. The ore occurs in lenses up to 13 ft wide which can be mined to approximately three feet. The over- all grade is 0.11 oz gold per ton and there are sulphide reserves below the oxide material. These reserves are marginally higher in grade and the gold content is cyanide recoverable. Mine reserves total some two million tons which is sufficient for eight years of production.

Black Swan’s participation in the project has been financed through private placements. The company has managed to issue relatively small numbers of shares at favorable prices while its stock responded to developments at Gabinintha.

The company can earn a 60% interest in the Merriland project in Queensland which has reserves of 110,000 tons grading 0.35 oz gold. Some spectacular gold values have been reported from the property which is near the Mount Leyshon gold mine, a 50,000-oz-per-year producer. Drilling at Merriland has concentrated on one of three vein structures and more work is planned by year-end. The objective of the program is to block out sufficient reserves for a production decision next year. Preliminary studies indicate that a production rate of 200 tons per day will yield approximately 60,000 oz gold per year.

Working capital is currently about $1.2 million and the company is examining a number of other opportunities as well including a few in Canada. Mr Fisher predicts that Gabanintha will be a stepping zone to increased gold production in the future. Its corporate target is 50,000 oz gold by 1990.