Under an agreement with Atlas (NYSE), San Francisco-based Homestake Mining (TSE) can earn a 60% interest in 450 claims on the southern portion of the Gold Bar property near Eureka, Nev.
Homestake must spend $3 million on exploration over five years, deliver a bankable engineering report and proceed with development work prior to the fifth year.
Last January, mining operations at the Gold Bar were suspended owing to a dispute between Atlas and its contract miners. In spite of this, gold production continued with the processing of various stockpiles of low-grade and refractory ore. This material was recently depleted.
As a result, Atlas will be placing its mill on standby while negotiations with the miners continue and while the company evaluates mining plans for the nearby Gold Pick and Gold Ridge deposits.
The suspension of operations at the Gold Bar caused Atlas’ gold production to fall to 51,696 oz. for fiscal 1994, compared with 55,080 oz. in the previous year.
In other news, Atlas has signed a joint-venture agreement with Rayrock Yellowknife (TSE) covering 42 square miles along Nevada’s Battle Mountain Trend.
It has also bought a 37.2% equity interest in Granges (TSE), which holds about $50 million in cash and a 50.5% interest in Hycroft Minerals & Development (TSE). The latter owns the Crofoot-Lewis gold-silver mine, also in Nevada, which produced 41,265 oz. gold and 131,316 oz. silver in the first six months of 1994.
Atlas is also seeking shareholder approval to buy a 19.9% interest in Dakota Mining (TSE). Dakota owns the Gilt Edge gold-silver mine in South Dakota and the Stibnite gold mine in Idaho, as well as a 40% interest in the Golden Reward mine in Nevada.
Once shareholder approval is granted, Atlas will combine Granges, Hycroft and Dakota into one company.
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