Construction of the Mt. Hamilton gold project in eastern Nevada is now under way and owner Rea Gold (TSE) expects to be in production by the fourth quarter.
Yearly production at the planned open-pit, heap-leach operation is projected at 50,000 oz. at a cash cost of less than US$240 per oz. including silver credits. (Silver production should exceed 190,000 oz. per year, based on the 1.3-million-ton-per-year mining rate.)
Minable reserves in the Seligman and Centennial deposits are estimated at 9.04 million tons grading 0.052 oz. gold and 0.38 oz. silver per ton. Rea recently secured financing to buy the property and place it in production through a $24-million special warrant issue. It received the funds out of escrow on June 9 and completed the purchase for US$5.2 million. The vendors retain a 2.5% net smelter return capped at US$2.5 million. Pre-production and capital costs are estimated at US$10.4 million, including working capital, and Rea has secured capital leases totaling US$11 million on mine rolling stock.
In addition to construction work, Rea is exploring the property in an effort to expand reserves.
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