Brohm gets final permits for South Dakota gold mine

All permits are in place for Brohm Resources’ Gilt Edge gold property located in the Black Hills of South Dakota.

The $17.5-million open pit, heap leach project is slated to come on stream in August, producing 45,000 oz gold per year. “Annual production could increase to 175,000 oz when the large sulphide reserves on the property come into play,” Wayne McClay, president, reports. He estimates operating costs will be around $240 per oz and could decrease to $200 per oz when the sulphide ore comes into production.

Proven and probable oxide ore reserves are 6.7 million tons of 0.4 oz per ton. In the same category sulphide ore reserves on the property stand at 30 million tons of 0.4 oz.

Earth work was completed in December and crushing and processing equipment has been ordered. The final permit amendments granted by the South Dakota State Board of Minerals and Environment allow Brohm to proceed with an on-off method of heap leaching, increase the ore process rate and expand the pit and waste dump areas. McClay explains that this enables the company to mine and process oxide ore using only one leach pad.

“We are in the process of drilling and permitting for the sulphide project on the same property,” he says. He anticipates production from this project could begin by 1991.

Brohm has spent approximately $10 million(US) on the project to date. The company recently agreed to borrow $5 million from Mfc Mining Finance Corp. to finance construction of the oxide ore processing facility (N.M., Mar 21/88).

Brohm and mfc are in the final stages of negotiating a merger agreement. The share exchange proposed is three mfc shares for two Brohm subject to a “fairness opinion” from a recognized Canadian investment institution. The two boards will be voting on the merger in mid-April and it would then be subject to regulatory approval.