Lamefoot deposit will boost output for Kettle River

Partners Echo Bay Mines (TSE) and Crown Resources (TSE) are busy with a US$15-million development program at their Lamefoot deposit in northeastern Washington state.

The property is part of the Kettle River joint venture, owned 70% by Echo Bay and 30% by Crown.

Gold production at Kettle River totalled about 44,000 oz. in the first half of the year at a cash production cost of about US$283 per oz. The companies hope to lower costs, shifting mining to two open pit deposits later this year and to the Lamefoot in the second half of 1993.

During the first half, ore was extracted from the Kettle and Overlook underground operations with mill throughput totalling about 300,000 tons grading 0.15 oz. gold.

Christopher Herald, president of Crown, said second-half gold production and costs should be similar to that experienced in the first six months of the year.

Herald said the Kettle deposit was depleted in July with the last ore run through the mill in September. Most of the ore is now being mined from the Overlook deposit with additional material coming out of the Key East deposit as open pit mining gets under way.

The joint venture hopes to lower production costs to about US$250 per oz. in 1993 by concentrating on mining its two open pit deposits — the Key East and Key West.

Herald said this will mean mining of the higher-cost Overlook deposit will begin at a later date in the project’s life.

At the end of 1991, proven and probable reserves at the Overlook deposit totalled about 2.06 million tons grading 0.133 oz. gold, Key East totalled 510,000 tons grading 0.131 oz. gold and Key West totalled 373,000 tons grading 0.127 oz. gold.

The joint venture hopes to further lower costs by bringing the Lamefoot deposit, about three miles from the mill, into full production later in 1993. The US$15-million development program includes driving an adit into the orebody as well as underground development and drilling to boost reserves. Current proven and probable reserves at the Lamefoot deposit total 917,000 tons grading 0.17 oz. gold.

The deposit ranges from 15 ft. to 150 ft. in width over a strike length of 1,500 ft. and remains open at depth and along strike. The deposit depth ranges from surface up to about 500 ft. and drilling on 100-ft. centres indicates the potential for an additional two million tons at a grade similar to the proven and probable reserve.

As a result, the companies see excellent potential to significantly add to the reserve life at the mine.

At Crown’s 49% owned Crown Jewel property to the north, joint venture partner Battle Mountain Gold (NYSE) is proceeding with permitting and detailed engineering work on the open pit project.

Herald said the permitting process should be completed by late summer or early fall next year and Battle Mountain hopes to complete construction of a 3,000-ton-per-day carbon-in-leach operation by mid-1994.

According to the companies’ joint venture agreement, Battle Mountain must fund all capital and development costs on the project while operating profits are split 49-51 immediately with no capital payback provision. Proven and probable open pit reserves at the Crown Jewel property are estimated at about 8.7 million tons grading 0.19 oz. gold at a strip ratio of about 11-to-1.

Gold output is expected to average about 175,000 oz. per year at a cash production cost of about US$160 per oz.

For the six months ended June 30, Crown reported a net loss of US$2.8 million on revenues of about US$3.6 million. After changes in working capital, the company reported negative cash flow of just over US$3 million.