Miramar puts Talapoosa gold project on hold

Citing low gold prices and inconsistent recoveries, Miramar Mining (MAE-T) has taken a $33.6-million writedown on the Talapoosa gold-silver project in western Nevada, suspending its development.

“At current gold prices, development of the Talapoosa project would not provide a sufficiently acceptable rate of return,” the company reports.

Since acquiring the project in 1995, Miramar has completed more than 80,000 ft. of drilling and conducted extensive metallurgical testwork. However, gold recoveries, last estimated at 55%-60%, remain unsatisfactory.

The project contains a potential open-pit, heap-leach resource estimated at 45 million tons grading 0.025 oz. gold and 0.33 oz. silver per ton. Much of the resource is unoxidized.

Miramar is also taking a further $3 million in writedowns for mineral properties, deferred exploration expenses and reclamation provisions related to other Nevada properties.

Meanwhile, gold production at the Con mine in Yellowknife, N.W.T., totalled 111,000 oz. in 1996, down 9% from the previous year. Operating costs averaged US$335 per oz., compared with US$323.

The mine milled 414,000 tons of ore grading 0.3 oz. gold over the past year, with recoveries reaching 89.3%.

Though total costs averaged US$380 per oz. (including depreciation and amortization), Miramar realized an average price of US$409 per oz. by hedging forward.

During the year, exploration added 108,900 oz. gold to the proven and probable reserve base, largely replacing the ounces mined. At year-end, proven and probable reserves stood at 3.5 million tons grading 0.33 oz., with additional possible reserves of 1.3 million tons averaging 0.31 oz.

A further resource of 1.7 million tons of 0.22 oz. gold raises the Con’s total inventory to 2 million contained ounces.

In 1996, surface drilling on the southern extension of the mine resulted in the discovery of Zone 104, which lies some 3,500 ft. south of the main shaft and at depths of 3,500-5,300 ft. below surface.

Seven widely spaced holes intersected gold mineralization over an area extending 1,800 ft. vertically and 1,500 ft. laterally. Intercepts included 14.6 ft. of 0.24 oz. gold , 7.8 ft. of 0.16 oz., 5.8 ft. of 1.06 oz., 2.7 ft.

of 0.1 oz., and 1.1 ft. of 1.16 oz.

Underground drilling this year will evaluate the area further.